Lawsuits by an insured against an insurer that include a claim for declaratory relief are common when an insurer denies coverage. The insured will argue that there are ambiguities in the policy. One argument may pertain to the use or definition of a term (or language) in the policy that is not defined in the policy. Another argument may pertain to an exclusion or limitation in the policy that ultimately renders insurance coverage illusory.
[I]n construing insurance policies, courts should read each policy as a whole, endeavoring to give every provision its full meaning and operative effect. When the language of an insurance policy is clear and unambiguous, a court must interpret it according to its plain meaning, giving effect to the policy as it was written. A policy term is not ambiguous simply because it is complex or requires analysis.
Arguelles v. Citizens Property Insurance Corp., 44 Fla. L. Weekly D1726a (Fla. 3d DCA 2019) (internal quotations and citations omitted).
When a term in an insurance policy is not defined in the policy (and there is an argument that there is an ambiguity), a court may look to dictionary definitions. Id. (looking to dictionary definition of the term “reside” which was not a defined term in the policy). This is because a dictionary definition contains a common acceptance of the meaning of the word. Id.
If a limitation or exclusion completely swallows up an insuring provision, then there is an argument that coverage is illusory. Id. citing Warwick Corp. v. Turetsky, 227 So.3d 621, 625 (Fla. 4thDCA 2017). “When limitations or exclusions [in the policy] completely contradict the insuring provisions, insurance coverage becomes illusory.” Purrelli v. State Farm Fire and Cas. Co., 698 So.2d 618 (Fla. 2d DCA 1997).
It is important to work with counsel when dealing with an insurance coverage dispute. Counsel will help you maximize insurance coverage based on the facts and the law.
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