One of my favorite aspects of being a lawyer for first-party insurance is being able to take apart an insurance and take a position on how a certain provision should be interpreted.
A regulation or statutory provision provides cover for loss caused by the enforcement of ordinances or laws governing the construction and repair of damaged buildings. 1 Property insurance differs in the way they provide this type of coverage. Most standard policies say something along the lines of covering "the increased costs you incur as a result of enforcing regulations or laws that require or regulate."
A typical ordinance or statutory provision looks like this:
We will pay you have any increased repair costs, or increased remodeling costs or increased construction costs that you may incur due to compliance with these laws, provided that such repair , remodeling or construction takes place in the same premises as the demolished building (s) and that the replacement construction is of the same height, floor area, style and for the same occupancy of the demolished buildings covered by this policy.
In the above-mentioned example, the provision covers the previous damages that have occurred. Other insurance policies may limit the ability to interpret "incur" by adding "incur and pay" or "incur, pay and complete" This means that the insurance company does not pay out the coverage until the property has actually been repaired or replaced. But when an insurance policy only requires the policyholder to "incur" increased costs or repairs, what does it mean to "incur", and when does this happen?
Outside the case of exploration, there are many other ways of interpreting political provisions. In a secondary source entitled " Additional insurance coverage that finances code upgrades, debris removal and damage costs " Jonathan C. Lerner analyzed these exact types of provisions and what it means to "incur" such losses.
Lerner tried to disassemble the language of the exact political provision I quoted earlier to find out what it means to "incur" and when this happens. He says:
[I] It must be noted that the language contains the condition that the cost actually arises before the carrier becomes obliged to pay. This creates an interesting question about what exactly does "incur" mean when such a language is involved. Does "incur" mean that the insured has caused the demolition company to demolish the house, remove debris and present a bill? Or does "incur" mean that the insured has actually paid for such a bill?
In this respect, it is a fundamental principle in the interpretation of the contract that when words in an insurance contract are clear and unambiguous, they must be given their clear and ordinary meaning. Since the word "vein" is not ambiguous, we must look at its simple and ordinary meaning. "Incur" is defined in the dictionary as follows: to become responsible or exposed as a result of one's actions; maintain; 2 No dictionary definition I found defined the word "incur" as "paid". As stated above, the word "incur" means to become responsible or subject to. The moment an insured becomes liable for a cost, such a cost "arises". 3
By supplementing his analysis of the word "incur" using the dictionary definition to distinguish its "Ordinary and ordinary meaning", the author determined that the insured suffers a loss the moment it becomes responsible for a cost.
His analysis, with the simple and common meaning of the word "incur," is consistent with the case of Florida. The Florida Supreme Court has agreed with other cases in Florida and has ruled that "incurring" means being liable for the cost, but not necessarily having actually used it. 4 My colleagues, Beaujeaux de Lapouyade and Corey Harris, have briefly discussed the cases Ceballo and Jossfolk in other blog posts:
Timing Is Everything ̵1; When Is Ordinance & Law Actually Incured
When can regulations or legal coverage be assessed?
Instead of looking mostly at the case for interpretation of politics, Lerner's analysis was very much about basic interpretation of contracts, using dictionary definitions to arrive at the common and ordinary meaning of the the word. This is just one of the many other ways in which policy language can be interpreted outside of research and analysis of caselaw.
Thus, if caselaw is limited or unavailable, there are still other methods of interpreting the policy language of your insurance contract, including one of my personal favorites: ejusdem generis ("the expression of a thing is the exclusion of a Other"). 5
1 https: //www.irmi .com / term / försäkringsdefinitioner / ordinans-eller-lag-täckning
2 American Heritage Dictionary of the English Language (4th edition 2006).
3 Johnathan C. Lerner, Additional insurance coverage Financing code upgrades, debris removal and damage costs 37 Cards 48, 53 (Summer 2008).
4 Ceballo v Citizens Prop. Ins. Corp. ., 967 So.2d 811, 815 (Fla.2007).
5 For an in-depth discussion on ejusdem generis, check out another blog post by my colleague Jamie Glass: https: //www.propertyinsurancecoveragelaw.com/2020/11/articles/insurance/the-fruit-salad- using-ejusdem-generis-in-tennessee- insurance-policy-interpretation /