Insurance is a picky business. Insurers write policies that look generous but are, in fact, fairly narrow. For example, an insurer or agent may use the term “all peril” when referring to a homeowners policy. The average person would understand that to mean all perils: hail, famine, war, lightning, a terrorist attack and so forth. Any damage to your home caused by anything under the sun will be covered.
The term “all peril,” though, is shorthand for “all the usual perils except the perils specifically excluded by this policy.” One of those would be a flood. Floridians are well aware of any obligation they may have to carry flood insurance, so they understand that flood is not one of all the perils covered, but they may be surprised to learn that a terrorist attack is not.
Policies that are not classified as “all peril” are more likely to name what is covered than what is not. (Which list is shorter? Include that one.) The woman in the case we’ve been discussing had a policy that promised to cover, among other things, damage from “explosion.”
When her insurer, State Farm Florida Insurance Co., denied the claim for damage to her condominium unit caused by an explosion, she took the company to court. The explosion may not have been caused by dynamite or a gas leak, she argued, but it was an explosion nonetheless.
She included an affidavit from a licensed physician that described the cause of damage. Her neighbor died, and the body “underwent advanced decomposition” during which “the internal contents of her body explosively expanded and leaked.” It was an explosion.
The flaw in her argument, the court said, was that the term “explosion” was not defined in the policy. When a term is not defined, a court must apply the plain language meaning. Would the average person understand the word “explosion” to include the explosive expansion of a corpse? Probably not, the court said.
What’s important to remember about this case is that it could happen to anyone, even without a dead body upstairs. Had the plaintiff met the procedural obligations discussed in our May 13 post, her claim still would have failed based on the plain meaning interpretation of a named peril.
Insurance Journal, “Florida Court: ‘Exploding Corpse’ Not Covered Under Property Policy,” Michael Adams, May 8, 2014
Rodrigo v. State Farm Florida Ins. Co., 2014 WL 1612494 (Fla.App. 4 Dist., 2014), April 23, 2014 via WestlawShare