Time For a Makeover
When it comes to policy language, the courts may expect the impossible from carriers.
By Eric Gilkey
Living, working, and growing up in Cincinnati, I have quite a few friends and acquaintances working for Cincinnati Insurance. It’s a large employer, and I even “worked” there for a single day many years ago in order to walk a mile in the shoes of the claims professional, chatting with management and helping out on a few auto damage claims. It was incredibly insightful, and I still draw upon the knowledge I learned that day.
So when last summer’s negative verdict came out against the company, a case that involved alleged hail damage to a metal roof, I heard all about it. How it was a potential game changer that something once considered cosmetic damage was now reason enough to replace an entire structure. In dollar terms, it’s easy to understand the tumult: what was pegged at $1,900 in damages ended up costing $175,500. (With that big of discrepancy, you’d expect a negative verdict for the accompanying bad-faith claim, too, but no dice for the plaintiff.)
If I was writing these policies, I’d be nervous. Reading through the records, it’s easy to see that insurers can’t expect any leeway from the courts. Pockmarks of sarcasm and antipathy riddle it much like, well, a hail-scarred metal roof, and flabbergasted judges chastised the company for having a policy that didn’t better define words like “direct,” “physical,” and “loss.”
It seems we are damned if we do, damned if we don’t with policy language. We’re either accused of making policies unnecessarily complicated, or reprimanded through the wallet for not defining nearly every word with paragraphs of text. It seems an impossible makeover to execute.