Washington Case Law Update: Washington Court Of Appeals Reminds Insurers That Ambiguous Insurance Provisions Must Be Resolved In Favor Of the Insured

Matt Ukishima

Washington Case Law Update: Washington Court Of Appeals Reminds Insurers That Ambiguous Insurance Provisions Must Be Resolved In Favor Of the Insured

From the desk of Matthew G. Ukishima: In Washington, insurance companies denying coverage are consistently challenged over ambiguous provisions in policies they issue. When provisions are ambiguous, courts have ruled in favor of the insured. When an underinsured motorist policy (“UIM”) specifically states it will pay compensatory damages for property damage, is it reasonable for an insured purchasing the insurance to interpret compensatory damages to include damages for loss of use, including covering rental car fees? Read on to find out.

Case Pointer: In this case revolving around disputed coverage for the reimbursement of rental car fees, the Washington Court of Appeals determined that an insurance provision was subject to two reasonable interpretations and was ambiguous as a matter of law, thus, must be construed against the insurer. Accordingly, it reversed the trial court’s denial of the insured’s motion for partial summary judgment. This case should serve as a reminder that, if and when a policy provision is reasonably susceptible to two different meanings, accepting coverage may be the safest route to avoid potential bad faith claims.

Kalles v. State Farm Mutual Automobile Ins. Co., Wash. Ct. App. No. 50827-3-II (Jan 23, 2019).

In this matter, Harold Kalles (“Plaintiff”) owned a new Land Rover that was damaged in an accident by an uninsured motorist. Plaintiff had obtained an insurance policy through State Farm (“Defendant”) which provided uninsured and underinsured motorist coverage. Defendant accepted coverage and paid to repair Plaintiff’s Land Rover, but declined to pay the fees Plaintiff incurred in renting a car while the Land Rover was in the repair shop. Plaintiff filed suit, arguing that his UIM coverage included compensation for the loss of use of his vehicle, which would have...

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