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Dawson and Rosenthal
Dawson and Rosenthal

Arizona House votes to allow discrepancies in policy cover sheets

An insurance policy is a contract. It is frequently quite long, printed in small type and full of dense, confusing language. Because insurance agents and insurers have a legal duty to make sure their clients understand the terms of their policy, usually when you sign up for a policy, you also get a cover letter that summarizes your coverage.

If some Arizona lawmakers get their way, insurers will not be obligated to put the truth on that cover sheet. Under a bill that passed the state House recently, the language of the policy itself would be all that counts, according to The Daily Courier.

That would mean that any lies, mistakes or misleading language in the cover sheet would be legally acceptable. It would not matter if an insured person or business relied on the cover sheet when filing a claim. The insurance company would be within its rights to deny the claim without being exposed to accusations of acting in bad faith.

Rep. David Livingston, R-Peoria, sponsored the bill. Though Livingston claims the bill is a consumer protection measure, under questioning by a colleague, he admitted that the “citizens of the state of Arizona” who had asked him to write the bill all came from the insurance industry.

Another potentially troubling aspect of the bill would affect Arizonians who are not fluent in English. If there are any differences between the non-English and English versions of the contract, the English version would win. In a state where many people’s first language is Spanish or a Native American language, this could lead to many insured people not getting the truth about their policies.

Insurance companies use a great deal of resources and influence to minimize their obligation to pay claims. To protect yourself from insurance bad faith, you need an experienced attorney representing you.