Contra Applicantem or Contra Proferentem Applicatio: The Need for Clarification of the Doctrine of Contra Proferentem in the Context ofInsured-Created Ambiguities in Insurance Applications

I. INTRODUCTION As Time magazine recognized when it declared "You" as the person of the year for 2006,1 consumers are playing an unprecedented role in creating and shaping the products they use. Although Time focused on the Internet's user-run juggernauts like Wikipedia, YouTube and MySpace, the expansion of the consumer's role is no less important in the insurance industry. Today, consumers of insurance can take charge of fulfilling their insurance needs in ways that were not available a decade ago. For example, insurance consumers can log on to the Internet and-seemingly as fast as they can say "Quote, Buy, Print"2-obtain an insurance policy. They can compare the rates of several different insurance companies at the click of a mouse.3 Consumers know that a mere "fifteen minutes could save [them] fifteen percent or more on [their] car insurance,"4 and they can take comfort in the fact that getting insurance these days is "[s]o easy that even a caveman can do it."5 Although insurance companies have not forsaken the we'11-take-care-of-you-intough-times angle in their advertising strategy, it is clear that insurance companies have not ignored consumers' desire to take an active role in determining and influencing how they obtain insurance coverage. Fortunately, the same Internet age that has provided consumers with increased opportunities to control their participation in the creation of the products they consume has also produced ways of ensuring that consumers make fewer mistakes in shaping their products. For instance, many web pages are coded so as to apprise the consumer of illogical or conflicting responses to questions and other entries. Notwithstanding the safeguards that insurance companies may establish to deter mistake-making when consumers complete electronic applications, it is logical to assume that increased consumer participation in generating insurance contracts means that the potential for making mistakes in filling out insurance applications will also increase. For example, an insured may create an ambiguity when prompted to type in certain information. While the insurance industry can anticipate with relative certainty that mistakes in insurance applications will become more frequent to the degree insurers give more responsibility to consumers in filling them out, it is less clear how the courts will apply the law in determining which party will bear the burden of those mistakes and ambiguities. The most widely applied doctrine for resolving ambiguities in insurance contracts is the doctrine of contra proferentem, which generally means that ambiguities in contracts should be construed against the party who drafted the contract.6 With consumers shaping the terms and coverage of their insurance contracts by completing online or print forms, the potential application of the doctrine of contra proferentem begs the question of which party is truly the "drafter" of the insurance application. In other words, should courts invoke contra proferentem to construe ambiguities in insurance contracts against the applicant who "drafis" the responses to the application's questions or against the insurance company who drafts the language and creates the format of the application? In order to examine this question and to distinguish these two possible interpretations of contra proferentem in the context of insurance applications, this Comment uses the terms contra applicantem and contra proferentem applicatio, which are Latin for "against the applicant" and "against he who offers the application," respectively. Considering that current contra proferentem jurisprudence and scholarly commentary offers unclear guidance for which party should bear the burden of ambiguities created by a consumer when filling out an insurance application, this Comment proposes that courts should interpret ambiguities in favor of the consumer. In general, this Comment explores the doctrine of contra proferentem in the context of resolving insured-created ambiguities in insurance applications. …