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Contra Proferentem: Should your Claim Have Been Denied?

Attorney’s absolutely love to toss a Latin phrase in from time to time. “Contra Proferentem” strictly interpreted means “against the drafter.” This phrase appears most often when dealing with the relationship between an insurance company and its policyholders.

The idea is that a large, sophisticated insurance company has the time, money, and resources to pour all of its expertise into a policy that you eventually sign. As policyholders, we don’t usually have the same amount of time, money, or resources to do as much due diligence. This puts us, as policyholders, at a disadvantage. Further, since most insurance policies are sold on a take-it-or-leave-it basis, there’s little room for policyholders to negotiate conditions or exclusions we feel could be problematic.

To address this power imbalance, courts in the United States hold insurance companies to a higher standard when a policyholder contests a denial based on a part of the policy that could be considered ambiguous. This means that if you read a condition or exclusion within your policy and feel as though it could have just as easily been interpreted in your favor, then you probably have a reason to fight a denied claim.

In the event a claim is denied based on an ambiguous provision, courts typically decide in favor of coverage for the policyholder. This encourages insurers to write policies that should be plain and easy to understand. It should also encourage you, as a policyholder, to take a second look at the provision or exclusion that lead to your denied claim and make sure it is clear and easy to interpret.

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