Insurance companies typically have many more resources on their side: more time, more money, and countless employees working to save the insurance company money. Insurance companies make and keep money by collecting money such as from insurance premiums, and either denying insurance claims or delaying the claims process so much that they can retain as much money as possible, for as long as possible.
Despite their resources, insurance companies cannot afford to pay every single claim made and at the maximum payment amount of the insurance policy’s limits. One way the insurance company is able to avoid having to pay for a claim that they do not need to pay is by including insurance policy exclusions.
Like any other contract, an insurance policy is a contract with fine print that needs to be read and understood by injured claimants in order to succeed in getting the compensation they deserve after a car accident or truck accident. Insurance policy contracts’ fine print typically include exclusions that carve out areas that the insurance company specifically says it will not cover. There are many types of insurance policy exclusions, but the exclusions all have the same general function of limiting insurance coverage.
Intentional Acts Exclusion
One exclusion specifically excludes losses caused by intentional acts of the insured person. Often, this is the reason insurance companies will investigate into whether there is any evidence that the insured person committed an intentional act before a car accident or truck accident. Generally, an intentional or willful act of an insured is something he or she does on purpose with some degree of wanting to cause injury, or at least some knowledge or awareness that a loss like the loss that happened is likely possible. The law often distinguishes between the different levels of intentional acts. Intentional acts can range from arson, burning a person’s property, to letting out a known pollutant.
For example, the law usually sees a difference between what counts as specific intent and general intent. This means that the law sees a difference between whether the act is something the person actually wanted to happen, or just a natural result of a person’s actions that he or she should have seen coming.
In any case, each state has its own unique laws that affect how insurance policies, exclusions and the actions surrounding the accident are affected and understood. State statutes and laws usually state an insurance company is not responsible for a loss caused by intentional acts of the insured person.
Still, an insurance company cannot always completely escape responsibility just because the insured person acted willfully or on purpose, and caused the loss at issue. Even if a person was negligent, late, causing delays or not doing his or her part, the insurance company cannot outright say an insurance policy is not valid anymore or use this as an excuse to deny a claim.
While an insurance company may not be able to outright deny a claim or say an entire insurance policy is void and no longer valid if an insured person acts deliberately, the fact an insured person acted this way can still affect the case.
For example, depending on the state laws that apply, some states do not force insurance companies to indemnify the insured person in cases involving punitive damages. For the most part, insurance companies have to step into the shoes of the insured person and defend against the claim of an injured claimant. This means that if a case falls under the laws of a state where an insurance company does not have a pay for a loss caused by the insured person acting deliberately, then the insurance company does not have to indemnify the punitive damages sought in this type of situation.
Punitive damages are usually added on top of the usual damages in a case. Usually, damages take the form of money awards to an injured claimant after a car accident for medical treatment, property damage to the car, etc. Punitive damages, on the other hand, are added on top of these damages for particularly bad misconduct, especially harmful behavior or to teach a lesson.
Some states like California’s Insurance Code does not all insurance coverage for losses caused by willful acts of the insured person. These states believe that protecting a person for misconduct done on purpose is wrong. Many courts do not allow this because it would not be good social policy for the law to cover an insured person’s intentional acts that result in loss and punitive damages.
For example, in one case, Downey Venture v. LMI Ins. Co., a California court said that the insurance company did not have to provide coverage for its insured person even though the policy outright said it would under the facts of this case. In this case, the insured person wanted insurance coverage after being sued for malicious prosecution, which involves wrongfully filing of a lawsuit for an improper purpose, without an actual reason. The court said the malicious prosecution, by definition, involves intentional misconduct. Even though the insurance policy said it would provide coverage in a case for malicious prosecution, the court disagreed because the laws of the state did not allow insurance coverage for any kind of intentional, deliberate wrong that resulted in loss.
While some acts are obviously intentional and cause harm, it is not always clear and the language or wording of an insurance policy contract can make or break a case. In one Michigan case, Vanguard Ins. Co. v. Racinet, the son of a divorced couple was killed in a lawnmower accident while at his father’s home. The mother sued the father for wrongful death, which is a lawsuit resulting from the loss of a person’s life. The father sought insurance coverage from his homeowner’s insurance policy. Once the case reached a higher level court on appeal, the court decided that the policy language was unclear. On one hand, the insurance policy said that it would provide coverage for invasion of privacy, which is based on intentional, deliberate misconduct. On the other hand, the same insurance policy specifically excluded acts “intended” by the insured and limited coverage to “accidents.” Because the words of the insurance policy contract were unclear and contradicted each other, the appellate court decided that the contract should be interpreted against the side that wrote the contract, the insurance company. The court decided against the insurance company in this case because, even though it involved intentional acts by the insured person / policyholder, the policy language was worded to appear to allow insurance coverage for intentional acts. In other words, the exclusion for intentional acts was not clear.
How do I know if there is an insurance exclusion?
Once an insurance company receives a claim from an injured claimant, the insurance company has to let the claimant know about the exclusions that apply and back up its denial of the claim, such as the people who are excluded from insurance coverage, and any other defenses that may stand in the way of the injured claimant’s compensation –including an intentional acts exclusion.
In most instances, the insurance agent will bring up all of the defenses that can limit the insurance claim as he can so that the insurance company is protecting its interests and minimizing any possible payment. There are many insurance claims defenses. Typically, the insurance agent will send a reservation of rights letter to the policyholder if there are policy issues. Some defenses are waived, or given up, if the insurance company does not raise a time-sensitive defense on time.
What happens if the insurance company itself acts intentionally?
The insurance company itself is capable of intentional misconduct. For example, if an insurance company engages in fraud, deceives or tricks an injured claimant, then the claimant can come after the insurance company itself for causing emotional distress, and pretending that it would be fair to the claimant when it was a trick all along. In many cases, this looks like twisting, hiding or completely misrepresenting important facts when the insurance company is investigating the claim or processing the claim.
Sometimes, if an insurance company’s actions are bad enough, the insurance company exposes itself to bad faith liability.
Navigating how a state’s laws apply to your case and which policy exclusions apply require the knowledge and skills of an experienced personal attorney.
Contact an experienced personal injury lawyer
Without experience in the insurance industry or legal experience, understanding which factors or evidence can help or hurt your case can be difficult to understand.
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