Winona was a person of average intelligence, education, and experience in business. She negotiated for the purchase of insurance and paid the premium. The policy was mailed to her, but before it arrived a loss was suffered. When the policy was read, Winona could not determine whether the loss was covered because the policy was too difficult to understand. The loss is:

Question

Quizplus · Accepted Answer

The principle of reasonable expectations would apply in this case. Winona would have expected the policy to be written in understandable terms. Therefore, the insurer has an obligation to word the policy in an understandable way. If there is any ambiguity or confusion, the policy will be interpreted against the insurer, and the loss will be covered.

Winona Was a Person of Average Intelligence, Education, and Experience