Which principle allows ambiguous contract language to be interpreted in favor of the insured?

Which principle allows ambiguous contract language to be interpreted in favor of the insured?

• A. Ambiguities
• B. Estoppel
• C. Waiver
• D. Representation

Answer: (A)

Ambiguities in a contract are interpreted in favor of the insured. This rule, often called contra proferentem, arises because the insurer drafts the policy and shouldn’t benefit from unclear wording; when a term could mean more than one thing, the interpretation that protects the insured’s reasonable expectations is chosen. That’s why ambiguous language tends to help the insured. The other concepts describe different situations: estoppel deals with preventing a party from asserting a right due to prior conduct, waiver is the relinquishment of a known right, and representation is a statement used to induce a contract—none of these govern how ambiguous contract terms are interpreted.

Ambiguities in a contract are interpreted in favor of the insured. This rule, often called contra proferentem, arises because the insurer drafts the policy and shouldn’t benefit from unclear wording; when a term could mean more than one thing, the interpretation that protects the insured’s reasonable expectations is chosen. That’s why ambiguous language tends to help the insured. The other concepts describe different situations: estoppel deals with preventing a party from asserting a right due to prior conduct, waiver is the relinquishment of a known right, and representation is a statement used to induce a contract—none of these govern how ambiguous contract terms are interpreted.