How are ambiguities in a contract of adhesion typically resolved?

Ambiguities in contracts of adhesion are typically resolved in favor of the insured who did not draft the contract. A contract of adhesion is a standardized agreement created by one party, often a more powerful entity like an insurance company, and presented to the other party, the insured, on a take-it-or-leave-it basis. Due to the imbalance of power and the fact that the insured generally has little to no influence over the contract terms, courts often rule that any unclear or ambiguous language should be interpreted in a way that favors the insured.

This principle is rooted in the idea of protecting the less powerful party in a transaction. By resolving ambiguities in favor of the insured, the law upholds fairness and equity, ensuring that the party with less bargaining power is not prejudiced by vague language or terms that could be interpreted in multiple ways. This approach encourages insurers to draft clear and unambiguous policies, thereby holding them accountable for providing understandable terms to their clients.

The choices related to the insurer or the party that paid premiums do not align with this principle, as they disregard the core reason for the rule—protecting the party without equal bargaining power from potential exploitation.