Insurance policy language is meant to be clear, but sometimes it gets twisted in ways that cause confusion and unfairness. George Reede, a partner at Zelle LLP, recently shared his thoughts on how insurance policy words are often misused, leading to misunderstandings and disputes.
Early in his career, Reede recalls a meeting before a deposition in a fire case. When asked where a faulty product was at the fire’s starting point, the insured’s answer was chilling: “Where do you need it to be?” This illustrates a problem some lawyers face, treating policy words not as fixed but as flexible, changing meanings based on what they want them to say.
Reede points out that the main goal with insurance policies should be to figure out what the writers actually intended. Courts agree. For example, the Supreme Court of Virginia has said that every clause and phrase in an insurance contract should be read together to understand the true meaning and purpose behind the words.
However, problems often start with how these policies are written. If drafters do not use clear language, policies become ambiguous. This “original sin” makes it easier for later interpreters to misuse words. Reede quotes Judge Learned Hand to highlight that insurers who give ordinary words strange meanings are responsible for the confusion that follows.
Reede warns against rushing to label words as ambiguous just because they have multiple dictionary meanings. Calling something “faux ambiguity” distracts from the search for the genuine intent behind the words. Ignoring parts of the policy, or omitting vital language, is another common issue. He gives an example from a court case involving a virus exclusion where the court failed to apply the policy’s anti-concurrent causation clause, essentially ignoring important language meant to limit coverage.
Sometimes, policy words are stretched beyond their reasonable limits. Reede describes a court ruling where a driver who had exited his vehicle and walked several feet away was still considered “getting out” of the car. Such strained interpretations can confuse what the policy truly covers.
Reede also reminds attorneys to avoid outright lies in their interpretations. Staying honest and truthful is essential, especially in matters as serious as insurance coverage.
In closing, Reede calls on everyone involved—those who draft policies and those who interpret them—to respect the true intent behind the words. Instead of twisting language to suit hindsight preferences, the aim should be to honor the coverage actually agreed upon. For those who care about doing the right thing, this is a reminder to stay focused on truth. For others, Reede extends a call to rethink their approach and commit to integrity.
Reede’s message underscores how important clear and honest language is in insurance. When words are used fairly, everyone gets the coverage they expect without confusion or unfair games.