Looking for Some Unambiguous Insurance Policy Language? Here’s Some

Insurance contracts often provoke disputes over language interpretation. A recent case out of West Virginia, Erie Insurance Property & Casualty Co. v. Chaber, No. 16-0490, overturns on appeal the lower court’s finding of ambiguity, declaring that the language at issue was in fact unambiguous.

The Chabers had an insurance policy that excluded “earth movement,” which was defined as including “landslide . . . whether . . . caused by an act of nature or . . . otherwise caused.” Soil and rock slid down a hill behind the Chabers’ property and damaged it. The insurance company refused to pay out, pointing to the exclusion of landslides. The Chabers alleged that the landslide was caused by improper excavation, not natural causes, and thus shouldn’t have been excluded under the policy. The lower court found that the insurance policy was ambiguous, and that the Chabers might have expected that landslides caused by actions of humans were covered. The appellate court, however, disagreed. 

The appellate court found that previous cases had found ambiguity in insurance policies that excluded events arising “from natural or external forces.” In contrast, the Chabers’ insurance policy language was the much more general “act of nature or . . . otherwise caused,” losing the word “external” that had been considered ambiguous. The language in the Chabers’ policy was relatively new but the few courts that had considered it had found it to be unambiguous. Therefore, the appellate court found the policy was unambiguous and covered landslides, whether human-triggered or naturally occurring. 

I always find it interesting when courts disagree regarding ambiguity, because the very fact of courts disagreeing seems to indicate ambiguity! However, this policy does seem to be unambiguous in its breadth of exclusions. Possibly the lower court just felt bad for the Chabers.