Interpretation of Insurance Policies

The interpretation of an insurance policy presents a question of law that is reviewed de novo (from the beginning; all over again). Dancey v Travelers Prop Cas Co, 288 Mich App 1, (2010). “Because insurance policies are contractual agreements, they are subject to the same rules of contract interpretation that apply to contracts in general.” Sherman-Nadiv v Farm Bureau Gen Ins Co of Mich, 282 Mich App 75 (2008). Unambiguous language must be enforced as written. Century Surety Co v Charron, 230 Mich App 79 (1998). A court must “give effect to every word, phrase, and clause in a contract and avoid an interpretation that would render any part of the contract surplusage or nugatory.” Klapp v United Ins Group Agency, Inc, 468 Mich 459 (2003).

This holds true for both sides. Clever attempts to parse policy language will not be tolerated.