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Published: Nov. 10, 2020, 3:40 p.m.

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A site for the insurance claims professional and anyone who wants to know. https://zalma.com/blog.

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The first thing every person representing an insurer with regard to a potential fraudulent claim must understand that the insurance policy is the basis for every insurance fraud investigation.  Without an insurance policy there can be no insurance fraud. The insurance policy contract describes the rights and obligations of the parties to the policy of insurance. It contains, in clear and unambiguous language, weapons to defeat a fraudulent claim.

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The construction of insurance contracts should be, but often is not, governed by the same rules of construction applicable to all contracts. The courts claim that when they construe an insurance contract it gives the terms of the policy their ordinary and generally accepted meaning. The primary goal of the court is to give effect to the written expression of the intent of the parties to the insurance policy.

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Some rules that must be followed when construing or interpreting an insurance contract include:

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If the terms of the policy are in any respect ambiguous or uncertain, it must be interpreted in the sense in which the promisor (the insurer) believed at the time of making it, that the promisee (the insured) understood it.

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If the language of a policy or contract is subject to two or more reasonable interpretations, it is probably ambiguous.

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Where an ambiguity involves an exclusionary provision of an insurance policy, courts adopt the construction urged by the insured as long as the construction is not unreasonable, even if the construction urged by the insurer appears to be more reasonable or a more accurate reflection of the intent of the insured and insurer.

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In reaching the conclusion that a policy exclusion was ambiguous, and the policy, therefore, provided coverage, the courts should follow the settled rule that any ambiguity or uncertainty in an insurance policy is to be resolved against the insurer and that if semantically permissible, the contract will be given such construction as will fairly achieve its object of providing indemnity for the loss to which the insurance relates.

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It is a maxim of law that a contract should be construed against its drafter. The maxim is sometimes referred to as the contra preferendum

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