Tennessee has a statute, T.C.A. § 56-7-130, concerning insurance company requirements with respect to providing sink hole coverage and handling sink hole claims. The statute was recently amended, and prior to July 1, 2014, was the subject of much litigation. At issue was whether the statute requiring insurance carriers to “make available” sink hole coverage required them to actually go out and notify existing insureds of the availability of the sinkhole coverage or whether the carriers simply had to have sinkhole coverage available in case an insured wanted to purchase it.
The issue was recently decided in the case of Keith Patterson, et al. v. Shelter Mutual Insurance Company, M2014-01675-COA-R9-CV (Tenn. Ct. App. 2015). This was an action by insured homeowners against an insurance company alleging Shelter Insurance Company failed to “make available” coverage for sink hole activity to the insureds as required by the former statute. Shelter moved for summary judgment contending that the statute did not require it to notify plaintiffs who were existing insureds that sink hole coverage was an available option. Plaintiffs filed a cross motion for summary judgment on the same issue which was granted by the trial court. However, the Court of Appeals reversed the grant of summary judgment to plaintiffs finding that the statutory language, “make available” does not require insurance carriers to provide notice to insureds that sink hole coverage is available. Id.
The phrase “make available” was not identified in the earlier version of the statute. The Court of Appeals found t there was no appellate decision in Tennessee interpreting the phrase in the context of the statute. For this reason, the Court of Appeals turned to dictionary definitions to ascertain the natural and ordinary meaning of “make available.” Id. None of the definitions it examined contained any requirement that one party notify the another party in order to make something available. Instead, the Court of Appeals found that “an item or project is made available when it can be obtained.” Id. As an example, the Court of Appeals found that a library makes a book available by having the book on its shelves, but does not have to inform its patrons that it has a specific book or that a book is available to its patrons – books are made available simply by being a part of the library’s collection. Id. In the same way, an insurance company makes sinkhole coverage when it’s obtainable upon request by an insured.
The Court of Appeals also referenced other statutes that specifically require an insurance company to “offer” something to an insured. In the original sinkhole statute, the word “offer” did not appear. The Court of Appeals concluded that the statute did not require insurers to notify policy holders that they could purchase sink hole coverage. Use of the words “make available” only required insurance companies to make sink hole coverage obtainable. The Court of Appeals found Shelter did just that when it filed an endorsement with the Department of Commerce and Insurance. Id. Thus, we now know that the phrase “make available” simply means to have something available but does not require an offer or notification to insureds.