Important Terms Need to be Defined In An Insurance Policy

© 2009
Barry Zalma
ClaimSchool, Inc.

Insurance companies are loathe to load their policies with definitions of the various terms used in the policy because multiple definitions make it more difficult to read. However, the use of “easy to read” language in insurance policies tends to make some terms less than precise and open the possibility that a court will conclude an important term is “ambiguous” and interpret it against the interests of the insurer.
The lack of a definition of an important term can cost the insurance company a great deal of money because a court may interpret the policy to mean something the insurer did not intend it to mean.