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Interpreting Insurance Policies: Know The State Laws and Interpretation Rules

Insurance policy concept.

If you are reviewing or attempting to interpret an insurance contract or legal issue, you can easily find yourself in the weeds and down various rabbit holes. Because of the complexity of this topic, you must first focus on the crucial issues of state laws and interpretation rules of insurance policies. In doing so, you will have to determine which state law applies to the situation, and then you can address the interpretation rules.

State Laws of Insurance Policies: Choice of Law Standard

When dealing with an insurance policy, you should never assume that the law of the state where a loss or issue occurs is the law that applies. Various state laws, or federal law, may rule the case. This is part of what legal professionals often call the choice of law.

Typically the law that applies to a given insurance policy is the law of the place where the insurance policy was made. And the place where the insurance policy was made is typically defined as the place where the last main act of completing the insurance policy contract was completed.

When property insurance adjusters use the state law where the loss happens without consideration of choice of law rules, they may be making a mistake.  If you have an insurance-related dispute, you need help from a highly experienced law firm. This type of firm is capable of evaluating state laws and interpretation rules of insurance policies.

Interpretation Rules of Insurance Policies: Further Analysis

Once your legal team resolves the choice of laws issues, they will interpret the rules of insurance policies within those laws. For instance, they must check that the policy does not violate its own state’s laws. This is critical in a state like Oregon where there is a law that can invalidate policies that require adherence to laws of another state. Oregon law states specifically that no policy of insurance shall contain any:

  • Condition,
  • Stipulation, or
  • Agreement requiring anyone to construe the policy according to the laws of any other state or country.

If the policy violates this law, the court will find it invalid.

Exceptions to Standard State Laws and Interpretation Rules of Insurance Policy Findings

Within all of the legal analysis and findings, there are exceptions. An often-referenced study states that in the situation of determining location and then interpretation of rules, some courts make exceptions to standard conflict of law resolutions because:

  • The performance of the insurance coverage was in a state other than the state in which the policy was delivered; or
  • One state involved has a strong history of regulating an insurance contract whose risks are located within the state.

If a court determines either of the above is present, it may well apply an exception to the general choice-of-law rule. Tricky exceptions to the law is another reason a trusted law firm is so valuable. They have the skills and resources to go through all the legal analysis needed.  Often, experienced attorneys have addressed similar cases and therefore have a starting point regarding the laws in their state.

Without a lawyer, you should never attempt to address:

  • Interpretation rules of insurance policies, or
  • State laws of insurance policies.

Nor should you rely on what an insurance adjuster tells you are the likely laws covering your case. Some insurance companies, unfortunately, act in bad faith. Turn to a lawyer who deals in insurance issues to analyze your policy, your individual circumstances, and choice of law standards. They can assist you in finding the answers to all your questions regarding your Insurance policy and the law.

D’Amore Law Group: Committed to Providing Excellent Service

The attorneys at D’Amore Law Group are leaders in the trial lawyer community at the state and national level. We are committed to working closely with you as we address your injury, financial loss, and personal loss. Our practice areas include bad faith insurance, personal injury, nursing home abuse, medical malpractice, wrongful death, and much more.

Founding attorney Tom D’Amore has successfully concluded thousands of cases during his decades of practice. Our firm works tirelessly as advocates and as productive members in our community. When you need help, call or text our office at 503-222-6333 or reach us online. We have conveniently located offices in Oregon and Washington. Meet with us for your free consultation

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