Hionis v. N. Mut. Ins. Co. - 230 Pa. Super. 511, 327 A.2d 363 (1974)

Rule:

When a defense is based on an exception or exclusion in a policy, the Pennsylvania Supreme Court has held that such a defense is an affirmative one, and the burden is upon the defendant to establish it. Even where a policy is written in unambiguous terms, the burden of establishing the applicability of an exclusion or limitation involves proof that the insured was aware of the exclusion or limitation and that the effect thereof was explained to him.

Facts:

Plaintiff insured brought an action to recover under two insurance policies issued by defendant insurance companies, for fire loss. Plaintiff was granted a directed verdict and defendants sought review.

Issue:

Could the defendants stand behind a policy limitation or exclusion without meeting the burden of proof of establishing the insured's understanding and intention to become so bound?

Answer:

No.

Conclusion:

In affirming the decision, the court held that because defendants opted to present no evidence, they could not stand behind a policy limitation or exclusion without meeting the burden of proof of establishing plaintiff's understanding and intention to become so bound. Plaintiff was a layman whose only objective in obtaining insurance was the security of protecting the financial expenses he incurred in furnishing, improving and bettering the leased premises. The policy was couched in technical and unclear terms, and when the disputed clause and its subsections were read with the co-insurance provisions in the policies, greater confusion was apparent. The verdict, which amounted to the full coverage under the combined policies, was adequately supported by the evidence provided by plaintiff. Defendants did not object during the course of the trial when the verdict amount was fixed; nor, did defendants raise the issue in post-trial motions.