This is a brief lesson on the English language as used in insurance policies. Thankfully, the language in most policies in use today has evolved just as the English language—notably, American English—has evolved. For example, at one time it was common for a policy to begin: “For consideration, we [that is, the insurer] will….. etc.” Did that mean the insurer would consider what it would do? No, the use here is a now almost archaic use: “a recompense, as for a service rendered; fee; compensation” (Webster’s New World College Dictionary). Even until fairly recently, the section in homeowners policies for “reasonable repairs” advised the insured to keep track of the expenses incurred and forward them to the insurer “for consideration.” Of course, this led to confusion; was this to mean that the insurer would only think about paying the costs? Thank goodness this usage has all but disappeared.
This is not to say that all policies currently in use have changed language to reflect more modern usage. Since the language used in policies has, in many instances, been litigated so as to establish meaning, insurers have been reluctant to change something that the courts have ruled on. However, there is still some wording remaining in insurance policies that can cause confusion, since common language has long since made no distinction, or clarified, meaning.
This is particularly notable in the use of “may.” Now, in current speech, it’s common for someone to say, for example, “Well, I just may go to the store this morning.” It’s also just as common for someone to say “Well, I just might go to the store.” What’s the difference? To the listener, probably not much. The speaker is stating that, given the current circumstances, he or she will (or will not) climb in his or her car and head to the grocery.
But in insurance-speak, “may” takes the meaning your English teacher tried to drill into you:
“used to express permission” (Webster’s New World College Dictionary). Now, in today’s speech, “may” in this sense has often been replaced by can, as in “OK, you can go.” So, when you are confronted by “may” in your policy—homeowners, commercial property, inland marine, whatever, remember that “may” means “have permission to.” Here are some examples:
Commercial property: “You may extend the insurance … to apply to your outdoor fences….”
“If this policy covers your business personal property, you may extend that insurance to apply to….”
Homeowners: In the Appraisal Clause, “If you and we fail to agree on the amount of loss, either may demand….” In the Loss to a Pair or set Clause, “…we may elect to …repair or replace …”
The important thing to remember is that the insurer is using “may” to state what it has permission to do. The policy is not stating it might or might not do something, as in the example we gave of going to the store.
There are a few more word usages that we should touch on. First, the insurer’s use of “will” and “shall.” These words are most commonly seen when the insurer is telling you, the insured, what it will do, as in “we will pay,” or, less commonly, “we shall pay…” Second, in return for the insurer’s promise to pay, the insured must carry out certain duties. MUST, not can, or should, but must. We refer specifically to the insured’s duties following a loss. If you look at your policy, you will see a list of duties that must be carried out. Failure to fulfill these duties can result in the insurer not providing the requested coverage.
So remember, when all else fails, read the policy and remember what your English teacher taught you.