What do courts interpret an insurance contract to reflect?

Courts interpret an insurance contract to reflect the understanding of a reasonable person. This standard seeks to ensure fairness and clarity in the interpretation of contract terms, focusing on what an average person, with usual understanding and experience, would reasonably conclude from the words and provisions in the contract.

This approach is rooted in the principle that contracts should be understood in a way that is consistent with their intended purpose and meaning as they would be understood by the general public, rather than being driven solely by technical legal definitions. In doing so, courts strive to uphold the contract's intent and protect the rights of the parties involved, ensuring that agreements are not enforced in a manner that is excessively strict or convoluted.

While the clear terms of the contract are certainly important, the emphasis on a reasonable person's perspective ensures that interpretations are grounded in real-world understanding and communication, fostering accessibility and fairness in contractual relationships.