How are ambiguities in insurance contracts typically resolved?

How are ambiguities in insurance contracts typically resolved?

• A. In favor of the insurer
• B. By a court ruling
• C. In favor of the insured
• D. By the terms of the contract

Answer: (C)

Ambiguities in insurance contracts are typically resolved in favor of the insured due to the principle known as "contra proferentem." This legal doctrine holds that if a contract contains unclear terms, those terms will be interpreted against the party that drafted the contract, which in most cases is the insurer. The rationale behind this rule is to protect consumers, who are often at a disadvantage when it comes to understanding complex insurance policies. It encourages insurers to use clear and unambiguous language in their contracts. Therefore, when there is a dispute about what a term means, courts will usually seek to favor the interpretation that benefits the insured, promoting fairness and ensuring that policyholders receive the protection they reasonably expected when they purchased the policy.

Ambiguities in insurance contracts are typically resolved in favor of the insured due to the principle known as "contra proferentem." This legal doctrine holds that if a contract contains unclear terms, those terms will be interpreted against the party that drafted the contract, which in most cases is the insurer. The rationale behind this rule is to protect consumers, who are often at a disadvantage when it comes to understanding complex insurance policies. It encourages insurers to use clear and unambiguous language in their contracts. Therefore, when there is a dispute about what a term means, courts will usually seek to favor the interpretation that benefits the insured, promoting fairness and ensuring that policyholders receive the protection they reasonably expected when they purchased the policy.