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Interpretation Insurance Policy

Interpretation Insurance Policy

A policy provision is ambiguous when it is susceptible to two or more reasonable constructions.  (Waller, supra, 11 Cal.4th at p. 18.)  Language in an insurance policy is “interpreted as a whole, and in the circumstances of the case, and cannot be found to be ambiguous in the abstract.”  (Ibid.)  “The proper question is whether the [provision or] word is ambiguous in the context of this policy and the circumstances of this case.  [Citation.]  ‘The provision will shift between clarity and ambiguity with changes in the event at hand.’  [Citation.]”  (Bay Cities Paving & Grading, Inc. v. Lawyers’ Mutual Ins. Co. (1993) 5 Cal.4th 854, 868.)  Ambiguity “ ‘ “is resolved by interpreting the ambiguous provisions in the sense the [insurer] believed the [insured] understood them at the time of formation.  [Citation.]  If application of this rule does not eliminate the ambiguity, ambiguous language is construed against the party who caused the uncertainty to exist.  [Citation.]”  “This rule, as applied to a promise of coverage in an insurance policy, protects not the subjective beliefs of the insurer but, rather, ‘the objectively reasonable expectations of the insured.’ ” ’  [Citation.]  ‘Any ambiguous terms are resolved in the insureds’ favor, consistent with the insureds’ reasonable expectations.’ ”  (Safeco Ins. Co. v. Robert S. (2001) 26 Cal.4th 758, 763.)
E.M.M.I. v. Zurich American Ins. Co. 2/23/04 SC Feb 23 2004-S109609 

Furthermore, policy exclusions are strictly construed (see e.g., Waller, supra, 11 Cal.4th at p. 16; MacKinnon v. Truck Ins. Exchange (2003) 31 Cal.4th 635, 648), while exceptions to exclusions are broadly construed in favor of the insured (Aydin Corp. v. First State Ins. Co. (1998) 18 Cal.4th 1183, 1192; National Union Fire Ins. Co. v. Lynette C. (1991) 228 Cal.App.3d 1073.).  “ ‘[A]n insurer cannot escape its basic duty to insure by means of an exclusionary clause that is unclear.  As we have declared time and again “any exception to the performance of the basic underlying obligation must be so stated as clearly to apprise the insured of its effect.”  [Citation.]  Thus, “the burden rests upon the insurer to phrase exceptions and exclusions in clear and unmistakable language.”  [Citation.]  The exclusionary clause “must be conspicuous, plain and clear.” ’  [Citation.]  This rule applies with particular force when the coverage portion of the insurance policy would lead an insured to reasonably expect coverage for the claim purportedly excluded.”  (MacKinnon, supra, at p. 648.)
E.M.M.I. v. Zurich American Ins. Co. 2/23/04 SC Feb 23 2004-S109609 
 

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