Policyholder Pulse
Most states apply the rule of contra proferentem, resolving ambiguous policy language against the insurer and in favor of coverage. Insurers, after all, have control over their policy language and it is
their responsibility to ensure the language is clear. Some states require the use of extrinsic evidence before resolving ambiguous language in favor of the policyholder, and many consider the reasonable expectations of the parties in interpreting policy language.
Arizona courts have applied a variant of contra proferentem. They first view the language from the standpoint of the average layman untrained in insurance. If the language can be interpreted in more than one way, courts will attempt to determine its meaning by examining (1) the language of the provision, (2) the purpose of the transaction, and (3) public policy considerations. If after that analysis the provision language is still ambiguous, the courts will construe the language in favor of coverage.