Joe has a dispute with his insurance company regarding how much he is entitled to recover on a claim. Joe believes he is entitled to get $8,000 based upon his interpretation of the policy wording. The insurer says the claim is not covered by the policy. Joe sues and a court of law decides that the policy wording is vague and ambiguous,and rules that the loss IS covered. What legal characteristic of insurance resulted in the court's decision?

Question

Quizplus · Accepted Answer

Insurance contracts are considered contracts of adhesion, meaning that the insurer provides a pre-written contract that the insured must accept as is. Any ambiguity in the policy wording is generally interpreted in favor of the insured, since they did not have a hand in drafting the contract. In this case, the court determined that the policy wording was vague and ambiguous, which resulted in the ruling that the loss was covered.

Joe Has a Dispute with His Insurance Company Regarding How