General Insurance PrinciplesQuestion 188 of 315
Because an insurance policy is a contract of adhesion, California courts will interpret any ambiguity in the policy:
a.Strictly according to industry custom
b.In favor of the agent who delivered the policy
c.In favor of the insurer who drafted the policy
d.In favor of the insured
Explanation
A contract of adhesion is drafted by one party (the insurer) and offered on a take-it-or-leave-it basis. Because the insured had no chance to negotiate the wording, California courts construe any ambiguity against the drafter and in favor of the insured.
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