Kanye West’s $10M Insurance Battle Shows Us All Why the Fine Print Matters

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Kanye West performs at the United Center on Friday, Oct 7, 2016, in Chicago.
Kanye West performs at the United Center on Friday, Oct 7, 2016, in Chicago. Rob Grabowski/Invision/AP Photo

Kanye West is in a massive legal battle with insurance underwriter Lloyd’s of London.

What’s at stake? A pretty $10 million to cover the losses stemming from his canceled “Saint Pablo” tour in 2016.

Here’s why the lawsuit is on the table and what it tells us about reading the fine print:

Fine Print Clause Causes Kanye West a Huge Legal Headache

Remember Kanye West’s highly publicized erratic behavior last year? If you don’t, here’s a quick rundown:

West completed 36 shows during his Saint Pablo tour. Then things fell apart. After his wife, Kim Kardashian West, was robbed of over $10 million worth of jewelry at gunpoint, West started to cancel shows left and right. At one point, the rapper claimed vocal cord issues were to blame, but he then started to unravel before the public eye.

After going on a bizarre political rant mid-November, West was admitted into the Resnick Neuropsychiatric Hospital at UCLA for exhaustion. West remained in the hospital for the next eight days, and the rest of his Saint Pablo tour was canceled.

Performances can be jeopardized by everything from natural disasters to the health of the performers. That’s why high-level performers often purchase insurance to mitigate the high risks of putting on concerts.

As reported by The Washington Post, West paid “hundreds of thousands of dollars” in insurance premiums, but now Lloyd’s refuses to pay the millions West and his company, Very Good Touring, are seeking to cover damages from the tour cancellation.

Its reasoning? West’s marijuana use could have caused the medical condition that led to the cancellation of the tour, and his insurance policy included a drug clause that stated “non-appearance stemming from use of alcohol or drugs will not be covered.”

What Yeezy Taught Us About Insurance Policies and Fine Print

West’s lawsuit denies the allegations that drug use caused the tour’s cancellation, but his situation can teach us a great deal about the fine print in insurance policies. When it comes to signing any legal document, you absolutely must read the fine print first.

If something happens that requires you to file a claim with your insurance company, hidden clauses can cause you a major headache and result in you not receiving the money you think you’re owed.

For example, some home insurance companies bury clauses about specific deductibles for catastrophic loss, according to Insure.com. These clauses often say that should you experience loss from a hurricane or tornado, you’ll have to pay a separate deductible in addition to your regular one when you file a claim.

Additionally, some homeowners insurance policies contain anti-concurrent clauses stating that if damage is caused by an excluded peril — one not covered by the policy — and a second event that is covered causes more damage or contributes to the initial damage, your insurance company will not cover any of the damage.

Even when you purchase life insurance, you need to watch out for clauses that might limit your coverage within the first few years. For example, a contestable period clause typically means that if you omitted health conditions from your application, you could be denied coverage. Other clauses may specify that if you were to die from suicide, or drug or alcohol abuse, the insurance company will not pay out the policy benefits to your family.

The moral of the story? Be smart when signing a legal document, especially when it comes to insurance coverage. If anything is unclear to you, make sure you ask before you sign. That way, if you were to experience something unexpected like West did, you’ll know exactly what financial issues you’ll face afterward.

Kelly Smith is a junior writer and engagement specialist at The Penny Hoarder. Catch her on Twitter at @keywordkelly.