"No experiment can be more interesting than that we are now trying, and which we trust will end in establishing the fact, that man may be governed by reason and truth. Our first object should therefore be, to leave open to him all the avenues to truth. The most effectual hitherto found, is the freedom of the press. It is, therefore, the first shut up by those who fear the investigation of their actions." --Thomas Jefferson to John Tyler, 1804.

Picky, picky

If insurance companies may be generating less and less trust these days – this concerning companies whose business it is to provide and whose advertising promotes a sense of security and peace of mind – there may be some good reasons for that.

Look at the Washington Supreme Court case out today in Laura Holden v. Farmers Insurance Company of Washington. Here’s the Washington Supreme Court’s summary:

Laura Holden purchased a renter’s insurance policy from Farmers Insurance Company of Washington. In the event of property loss due to fire, the policy provides coverage for the “actual cash value” of the damaged property. ACV is defined as “fair market value” at the time of loss. FMV is not defined. After a fire at her rented home damaged some of her personal property, Holden sought coverage under the ACV provision, which states that payments will not exceed the lesser of either policy limits or “the amount necessary to repair or replace the damaged property.” Farmers refused to account for Washington State sales tax when calculating the value of the damaged property. We are asked to decide whether, under the terms of this policy, the ACV provision unambiguously supports Farmers’ interpretation, or if instead it is subject to a reasonable interpretation that accounts for sales tax in calculating the FMV of damaged property. Because the ACV provision is ambiguous and accordingly must be construed in favor of the policyholder, we reverse the Court of Appeals and reinstate the trial court’s order granting Holden’s motion for summary judgment.

There wasn’t any question that the policy was in force, and that it covered the burned items. But the company was determined to contest any payout it could – up to and including the relatively minor sales tax component. Our personal experience with insurers in years past hasn’t been so negative. But it seems to be getting that way, more and more. Just read the appellate court decisions that keep coming down on topics like this.

Count your fingers when you sign their contracts.

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