Opinion ID: 852308
Heading Depth: 2
Heading Rank: 1

Heading: General Law of Policy Provisions

Text: Contracts of insurance are governed by the same rules of construction as other contracts. Allgood v. Meridian Sec. Ins. Co., 836 N.E.2d 243 (Ind.2005). In the absence of ambiguity, their words are given their ordinary meaning. Auto-Owners Ins. Co. v. Harvey, 842 N.E.2d 1279 (Ind.2006). We interpret policy terms from the perspective of an ordinary policyholder of average intelligence. Allgood, 836 N.E.2d at 246-47 (quoting Burkett v. Am. Family Ins. Group, 737 N.E.2d 447, 452 (Ind.Ct.App.2000)). Where an ambiguity exists, that is, where reasonably intelligent people may interpret the policy's language differently, we construe insurance policies strictly against the insurer. See Fidelity and Deposit Co. of Md. v. Pettis Dry Goods Co., 207 Ind. 38, 42, 190 N.E. 63, 65 (1934) (any doubts or ambiguities must be resolved most strongly against the insurer). This is particularly the case where a policy excludes coverage. Am. States Ins. Co. v. Kiger, 662 N.E.2d 945 (Ind.1996). At the same time, interpretation should harmonize the policy's provisions rather than place its provisions in conflict. Allgood, 836 N.E.2d at 247. Strict construction against the insurer derives from the disparity in bargaining power characteristic of parties to insurance contracts. Wagner, 912 N.E.2d at 810. The insurance companies write the policies; we buy their forms or we do not buy insurance. Id. at 811 (quoting Kiger, 662 N.E.2d at 947). Nevertheless, we enforce limits on coverage where the policy unambiguously favors the insurer's interpretation. See Allgood, 836 N.E.2d at 246-48 (holding that loss did not include coverage for diminution of value where automobile was repaired despite differences among courts' interpretations of similar or identical provisions). Likewise, we enforce contractual provisions that shorten the time to commence suit as long as a reasonable time is afforded, except where there is fraud, duress, and the like. New Welton Homes v. Eckman, 830 N.E.2d 32, 35 (Ind.2005); see Caywood v. Supreme Lodge of Knights & Ladies of Honor, 171 Ind. 410, 412, 86 N.E. 482, 483 (1908) (It is settled by the great weight of authorities that a provision in an insurance policy limiting the time in which suit may be brought thereon to a period less than that fixed by [the] statute of limitations is binding, unless it contravenes a statute.) (citing Riddlesbarger v. Hartford Ins. Co., 74 U.S. (7 Wall.) 386, 19 L.Ed. 257 (1868)). While contractual limitations shortening the time to commence suit are not favored, they do protect insurers from policy holders who voice no claim until the year has long since expired, promote early notification while evidence is available, and provide carriers with a basis for forming business judgments concerning claim reserves and premium rates. Summers v. Auto-Owners Ins. Co., 719 N.E.2d 412, 414 (Ind.Ct.App.1999). Where as here the insurance company is a named defendant in a suit commencing within months of the accident, unreasonable delay in pursuing a claim is clearly not a concern. [3] Affirmative suggests that Bradshaw's filing suit did not adequately prevent unreasonable delay in enforcing or pursuing the claim because its attorneys would have approached an uninsured motorist claim more thoroughly than the underinsured claim. (Oral Argument.) Affirmative insists on reading the time limitation exclusion under the uninsured provisions to require Bradshaw to state that he is suing under the uninsured provision within two years of the accident. (Oral Argument: any claim made under this portion of the policy must be filed within two years of the date of the accident) It also asserts that the policy requires notifying Affirmative of a potential uninsured motorist claim within two years. (Appellee's Br. at 4-6.)