A Georgia appellate court overturned an insurer’s denial of a homeowner’s claim based on the placement of a semicolon.A recent appellate court decision in Georgia illustrates the importance of crossing every T, dotting every I, and clearly writing out every comma. While a lower court ruled in favor of an insurer who denied coverage after a home fire, the state’s Court of Appeals reversed the earlier judgment based on the placement of a semicolon.
The case began in 2007, when Ronald Lee bought a home in Riverdale, Georgia occupied by his friend, Jim Constable, and Constable’s family. Three years later, Lee purchased an insurance policy on the home from agent Lawrence Arnold. Since Arnold was also a friend of Lee’s, the agent knew the home was not Lee’s primary residence, though Lee often stayed at the home when he traveled. Constable, who suffered from financial problems at the time, did not pay rent.
On the application, boxes for “primary” and “occupied by named insured” were checked off, while “secondary” and “additional residence for insured” were not. The application also listed Lee and Constable’s family as household residents.
A fire swept through the home in 2012, killing Constable and severely injuring one of his children. Lee submitted a claim to his homeowner insurer, Mercury Insurance Co., which denied the claim based on its argument that the home was not Lee’s primary residence. Lee sued, but a trial court ruled in Mercury’s favor. Lee then appealed the ruling, arguing that the policy covered the Riverdale home and its subsequent loss by fire.
Turning the Page
In overturning the trial court’s ruling, the appellate court pointed to a sentence in the policy that characterized a covered private residence: “ ‘Residence premises’ means the one, two, three or four family dwelling, condominium or rental unit, other than structures and grounds, used principally as a private residence; where you reside and which is shown in the Declarations.”
The court explained that the placement of the semicolon after the phrase “private residence” and before the word “where” divided the clause into two distinct but equally valid definitions. Since Lee’s home was a place “where [he] reside[d] and which [wa]s shown in the Declarations,” the court ruled that it was covered under the terms of the policy, even though it wasn’t his primary residence.
The Georgia case serves as a powerful reminder to insurance agents to construct policies with precise definitions, grammar, and punctuation. As a blog post from the Merlin Law Group stresses, “Something as small as the placement of a comma, semicolon, or colon may seem insignificant; but it may be pivotal to a policyholder’s entitlement to coverage.”
In the Lee v. Mercury Insurance Co. of Georgia suit, the plaintiff was able to recover his loss — but only after a protracted court battle and a favorable interpretation of a questionably punctuated sentence. Had the original policy explicitly specified that the Riverdale, Georgia home was Lee’s secondary residence, and, therefore qualified for coverage under the contract, the prolonged legal wrangling might have been avoided. Insurance agents can avoid a similar fate by gathering all significant facts about the policyholder and the asset being insured and poring over every punctuation mark before finalizing the policy.