Tuesday @ 2 With Chip Merlin we will focus on something that the Real Estate Insurance Act's blog should discuss more often: the basics of interpreting real estate insurance contracts. How can any claims adjuster provide all the insurance benefits without identifying the insurance terms and determining applicable coverages so that an investigation of facts and assessment of damages can be completed?
The most practical dissertation recently published and which I recommend can help anyone in interpreting insurance is Bill Wilsons, When Words Collide – Resolving Insurance Coverage and Claims Disput . This is not a legal dissertation but one that even lawyers who make insurance claims should read as well. Merlin Law Group Attorney Amy Currotto noted in, Book Review: When Words Collide, by Bill Wilson :
Bill understands insurance at the mobile level. His book teaches the reader how to dissect the mechanisms of confusing insurance terms and forms that all professionals in the insurance industry should know. From the very beginning, Bill draws the reader in by referring to pop culture to explain complex insurance concepts. Bill's range is impressive. He quotes Shakespeare, rock stars and even Inigo Montoya from The Princess Bride: & # 39; You keep using that word. I do not think it means what you think it means. “Above all, this made the book a very entertaining read.
The book begins with Bill's ten principles for policy interpretation, similar to the Ten Commandments ̵1; except for policy interpretation. Some of my personal favorites included "Insurance is NOT a commodity" and "RTFP!" This is an abbreviation for "Read the full policy." However, Bill admits that there are times where "F" has been given a different connotation. For example, when it is clear that no one has read the policy, to the detriment of the insured. It's Bill's humor and humor that really makes you read. These rules for interpreting the policy are referred to throughout the book and are woven into what is required to understand an insurance policy.
A more cerebral work, Insurance Contract Analysis written by the American Institute for Chartered Property Casualty Underwriters, has the late Don Malecki as co-author. It is full of information on the interpretation of the insurance contract and contains references to many concepts in good faith that many do not discuss after a loss has occurred. Example 1. Example 1.1 has an insurance consumer list of rights and responsibilities published by the National Association of Professional Insurance Agents and The Consumer Insurance Interest Group. Most insurance adjusters would never know about this and which insurance agents, who sell the insurance contracts to be interpreted, promise to support as principles.
There are many legal dissertations and legal review discussions on the interpretation of insurance contracts and how to accomplish such contract analysis. For example, in Journal of Insurance Regulation an article, "An Analysis of the Interpretation of Insurance Contracts: Common Law versus Strict Contra Proferentem ," 1 lists three pages reference material for students to learn and consider how the rules for interpreting insurance contracts differ and whether they affect insurance costs in the market. Interpretation I discussed an amicus card I submitted to South Carolina regarding the doctrine of reasonable expectations. I will discuss this standard of interpretation in our Tuesday at 2 session this afternoon, but would also like to point out what I said about the insurance product and why it is so important to us:
“The insurance industry can be the most influential industry in America, if not the world. Insurance is the basis of our finances and a necessity in daily life. You need to get a driver's license, own a car, buy a home, own a business and even receive medical care. While most people think of insurance only at the time of purchase, when accidents occur or disaster occurs, insurance is the only thing that stands between an individual, family or business and financial ruin.
Insurance is a product that transfers risk and gives people access to resources that they would not otherwise be able to afford. Simply put, insurance is a method of securing a bet; For the premium price, the insurer assumes the financial risk of a potential loss. The insurer collects the premiums for similarly placed insured persons, so it has the means to pay when covered losses occur. In most cases, individuals and companies would not be able to afford the insured loss, so insurance is necessary to keep a prosperous society afloat. When the risk of loss is assumed by third parties, banks lend money, products are manufactured and bought and individual wealth tends to increase. In response, individuals and companies achieve more prosperity and buy more insurance to protect against unaffordable losses. As society's prosperity increases, insurance becomes a necessity, not a luxury.
Everyone who participates in the real estate insurance industry must be skilled in interpreting real estate insurance policies and constantly studying them so that we can better serve the insuring public.
I hope you can join me this afternoon as we go through some of these basics. Here is a link to the live stream.
Thought for the day
In doubtful cases, the more liberal interpretation must always be preferred.
—Marcus Tullius Cicero  _______________________________________________
1 Henry, Randy D., “An Analysis of the Interpretation of Insurance Contracts: Common Law Versus Strict Contra Proferentem ,” Journal of Insurance Regulation Vol. 36, No. 1 (2007).