Case Law Wednesdays – Additional Coverage in Insurance Policies

Most insurance policies cover losses on an all risk basis if a claim is the result of a direct physical loss. Additionally, insurance policies contain sections describing what an insurance policy expressly excludes from coverage and any additional coverage they provide. Additional coverage found in an insurance policy are not excluded from coverage, instead they are situations where an insurance company specifically extends coverage to when the terms of the applicable additional coverage are met.

In Kings v. Sagamore Insurance Company [1], the insured filed a claim with his insurance company after the Lake County community clubhouse’s ceiling and soffit deflected downward. The Insurance Company argued that coverage did not extend to the collapsed ceiling because the requirements under the additional coverage section of the insurance policy were not met. The Insurance Company denied the insured’s claim based on the fact that the building was still standing and that the ceiling had not fallen on the floor.

The appellate court noted that the roof of the clubhouse had not fallen to the ground. However, the policy provided additional coverage for a collapse, which was defined as an abrupt falling down or caving in of a building or any part of a building. Although the provision was ambiguous, the Court interpreted the provision to provide coverage because the ceiling had lowered in level and the structure could not be occupied for its intended purpose. The appellate court reasoned that when there were two interpretations of a policy provision and one of the interpretations provided coverage, the interpretation that provided coverage would be applied because the exclusion had to be read strictly against the insurance company.

The language contained in your policy is extremely important. As we always caution, insurance coverage and exclusions should be reviewed every year to ensure that coverage is appropriate for the circumstances.

If you have sustained damage to your property, schedule a consultation with the experienced attorneys at Alvarez Law Group today. Call us at (786) 620-2820 or email to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. *

[1] Kings Ridge Community Association, Inc. v. Sagamore Insurance Company., 5D11-1051 (Fla. 5th DCA 2012)

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