An analysis of interpretation of insurance contracts: common law versus strict contra proferentem
Year: 2023
Type: article
Abstract: The majority of states recognize insurance policies as contracts of adhesion, in which the applicant must either accept the terms of the policy as written by the insurance company or reject the terms and accept similar terms from another insurance company (Plitt, 2010). As of June 2014, 44 states have adopted special rules interpreting insurance contracts to balance unequal bargaining power.1 One common alternative to traditional contract law is strict contra proferentem, which interprets ambiguous terms against the drafter without reviewing extrinsic or parol evidence. A second alternative, known as the reasonable expectations doctrine, interprets unambiguous policy language using the reasonable person standard. This article provides a discussion of the methods available to courts as it relates to interpreting ambiguous insurance contracts.
Source: Journal of Insurance Regulation
DOI: 10.52227/23499.2017
Authors: Cassandra Cole, Randy Henry
Institutions: Florida State University, Cornell University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4324117216