When an Insurance Policy Is Ambiguous, the Policy Is Interpreted

question 43

Multiple Choice

When an insurance policy is ambiguous, the policy is interpreted:

• A) against the insurer.
• B) in favor of the insurer.
• C) according to the dictionary meaning of the words.
• D) according to the meaning of the words in the insurance industry.

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Definitions:

Incapacitated

A state where an individual is unable to take care of themselves or their affairs due to physical or mental disabilities.

Contract Law

The body of law that governs the formation, enforcement, and interpretation of agreements between parties.

Guarantee

A formal promise or assurance, typically in writing, that certain conditions will be fulfilled or a product will meet a specified standard of quality.

Indemnity

A legal agreement to compensate for any losses or damages incurred by another party.