General Insurance PrinciplesQuestion 170 of 215
An ambiguous exclusion appears in a homeowners policy. Under California law, the ambiguity will most likely be construed:
a.Stricken from the policy entirely by operation of law
b.In favor of whichever party has the higher financial interest
c.Against the insured because the insured signed it
d.Against the insurer that drafted the contract
Explanation
Insurance policies are contracts of adhesion drafted by the insurer and offered take-it-or-leave-it. Under long-standing California case law, any ambiguity in the contract is construed against the drafter, which means against the insurer and in favor of coverage for the insured.
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