## Facts

- Florida insureds bought limited-liability home-health-care policies providing reimbursement subject to three dollar limits: a daily benefit, a per-occurrence maximum, and a lifetime maximum.
- The policies included an “Automatic Benefit Increase Percentage” provision that increased benefits annually if the insured paid an increased premium.
- A dispute arose over whether the automatic increase applied only to the daily benefit or also to the per-occurrence and lifetime maximums.
- The insureds, as a class, sued seeking the broader reading that increased all three benefit amounts.
- The insurer argued for a narrower reading and sought to use extrinsic evidence (e.g., intent and materials outside the policy) to support its interpretation.
- A federal district court found the policy ambiguous and the controlling Florida law on the use of extrinsic evidence to resolve ambiguity uncertain.
- The federal appellate court certified questions of Florida law to the Florida Supreme Court.

## Issues

1. Whether the policy is ambiguous as to whether the Automatic Benefit Increase Percentage applies only to the daily benefit or also to the per-occurrence and lifetime maximum benefits.
2. If ambiguous, whether a court should first attempt to resolve the ambiguity by considering extrinsic evidence before construing the ambiguity against the insurer.
3. Applying Florida rules of insurance-policy construction, whether the automatic increase applies to the per-occurrence and lifetime maximum benefits.

## Decision

- The court answered that the policy’s Automatic Benefit Increase Percentage applies to the dollar values of both the lifetime maximum benefit amount and the per-occurrence maximum benefit.
- The court agreed the policy language is ambiguous on the scope of the automatic increase.
- The court held that, once ambiguity remains after applying ordinary textual rules of construction, Florida courts do not consider extrinsic evidence to resolve it.
- The court resolved the ambiguity against the insurer and in favor of coverage, adopting the broader interpretation.

## Legal Principles

- Insurance policies are construed as a whole, giving effect to all provisions; ambiguities are construed strictly against the insurer and liberally in favor of coverage.
- An ambiguity exists when policy language is reasonably susceptible to more than one interpretation after applying ordinary, text-based rules of contract construction.
- In Florida insurance cases, if ambiguity remains after textual construction, courts construe the ambiguity against the insurer without resort to extrinsic evidence.
- Prior precedent on “ordinary rules of construction” does not require consideration of extrinsic evidence before applying contra proferentem in the insurance context.

## Conclusion

The Florida Supreme Court clarified that ambiguous insurance-policy language, once unresolved by text-based construction, is construed in favor of coverage without using extrinsic evidence, and it interpreted the automatic benefit increase to apply to the policies’ per-occurrence and lifetime maximum benefits as well as the daily benefit.


Wash. Nat’l Ins. Corp. v. Ruderman, 117 So. 3d 943 (Fla. 2013)