What does Ambiguity Principle mean? Read on to discover the definition & meaning of the term Ambiguity Principle - to help you better understand the language used in insurance policies.
Insurance industry rule that if the terms of, or words in, an insurance policy do not carry a clear meaning then the meaning which goes against the insurance firm (and in favor of the insured) prevails. This is because an insurance policy is an adhesion contract the insured had no input in setting the terms of the policy.
We hope the you have a better understanding of the meaning of Ambiguity Principle.