Often, insurance policies are long and confusing. But, it may be worth the time and effort to read through any policies that you purchase to make sure you clearly understand which items of damage are covered and which are not.
In the recent Nevada Supreme Court case of Century Surety Company v. Casino West, Inc., a casino and its insurance company had a disagreement about whether the insurance company would cover losses from deaths caused by carbon monoxide poisoning in a hotel.
The insurance company argued that the deaths were not covered because they were caused by “pollution” which was excluded from coverage. The definition of pollution in the insurance policy included all irritants or contaminants, but failed to state whether indoor contaminants such as carbon monoxide were included in the definition. The parties disputed whether the exclusion was intended to apply to only traditional outdoor pollution, or whether it included indoor contaminants and irritants. The insurance company argued that the exclusion was so broadly worded that it excluded any type of contaminant regardless of where it originated. The casino argued that the exclusion only denied coverage for traditional environmental factors. The Court noted that the definition of pollution was broad enough to deny coverage for indoor carbon monoxide poisoning, but that interpretation would be “absurd and contrary to any reasonable policyholder’s expectations.” The Court found that the exclusion was unclear, and that a reasonable person, when reading their policy, would not have been able to determine what was and was not covered.
Accordingly, the Nevada Supreme Court found that the policy exclusions were ambiguous; meaning, they could have been read and interpreted in more than one reasonable way. If an insurance policy is ambiguous, then the Court will interpret the policy in favor of the insured, and not the insurance company. Further, the Court cautioned that all exclusions must be so narrowly tailored to clearly let the insured know exactly what will not be covered. For that reason, the Court interpreted the policy in favor of the casino and against the insurance company, and found that the deaths were covered by the policy because carbon monoxide poisoning could not be excluded.
The issue of policy exclusions can come up in any context; when you have a car accident, when you have water damage in your home, if a guest is injured while visiting you, if your wedding ring is lost, or many other reasons. Your insurance company may seek to unfairly exclude your damages when they should in fact be covered. If you think your insurance company is unfairly denying your coverage, contact our experienced attorneys at Clear Counsel Law Group who can assist you in making sure you are being treated fairly and that you are getting the coverage you paid for.
 130 Nev. Adv. Op. 42, May 29, 2014.