Pennsylvania Life and Health Insurance Exam Practice Question
Sometimes when there is ambiguous wording in an insurance contract, the courts may rely on what doctrine to determine if coverage applies?
Correct Answer: D
Rationale: In cases of ambiguous wording in insurance contracts, the Doctrine of Reasonable Expectations is applied to ensure that the insured's reasonable expectations of coverage are honored. This doctrine prioritizes the understanding that a typical policyholder would have regarding the terms of their insurance, thus providing protection against misleading language.
The Doctrine of Good Faith (A) focuses on the ethical obligations between parties but does not specifically address ambiguity in contract terms. The Doctrine of Indivisibility (B) pertains to how certain obligations cannot be divided, which is unrelated to interpreting coverage. The Doctrine of Proximate Cause (C) deals with causation in liability claims rather than contract interpretation.
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