General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Because insurance policies are contracts of adhesion, ambiguous policy language is generally interpreted:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A contract of adhesion is drafted entirely by the insurer and offered on a take-it-or-leave-it basis, so the insured has no opportunity to negotiate the terms. Because the insurer controls the language, courts resolve any ambiguity against the drafter — a rule known as contra proferentem — meaning unclear policy language is read in favor of the insured. This doctrine protects the party with less bargaining power in the insurance relationship.
Why the other options are wrong
- B) The drafter bears the risk of unclear language; courts do not favor the insurer when its own wording is ambiguous.
- C) The rule is not a 50/50 compromise; ambiguous terms are resolved wholly in favor of the insured.
- D) Ambiguous language is still enforced, but interpreted against the drafter; it is not discarded from the policy.
Memory hook
Drafted by the insurer, read by the insured. Any doubt goes to the reader.