A Video Explaining the Interpretation of Insurance Contracts

Read the full article at https://www.linkedin.com/pulse/rules-contract-interpretation-barry-zalma-esq-cfe and see the full video at https://youtu.be/TktjMrIBaOc  and at https://rumble.com/vnnb6q-a-video-explaining-the-interpretation-of-insurance-contracts.html and https://zalma.com/blog plus more than 3950 posts.

The following rules govern the construction of contracts of insurance:

If the terms of a promise are in any respect ambiguous or uncertain, it must be interpreted in the sense in which the promisor believed at the time of making it, that the promisee understood it. [California Civil Code § 1649] (which provides an excellent definition of the basic rule of interpretation followed in most states).

“If a written contract is so worded that it can be given a definite or certain legal meaning, then it is not ambiguous.”

However, if “the language of a policy or contract is subject to two or more reasonable interpretations, it is ambiguous.” Simply stated, all contracts are interpreted equally except insurance contracts, which are interpreted to favor the insured in the event of an ambiguity.

An insurer may not rely on an ambiguous interpretation of a policy provision that, if construed as the insurer contends, would deprive the insured of coverage.

When the language of an insurance contract is reasonably susceptible to two constructions, it should be construed in favor of the insured.

It is not necessary to show that the construction against the insurer is more logical than that against the insured; it is sufficient to show that the construction in favor of the insured is equally reasonable with that which favors the insurer.