Opinion ID: 4249099
Heading Depth: 3
Heading Rank: 1

Heading: Public Policy Implications

Text: ¶31 The practice of treating questions of interpretation of insurance contracts differently and of providing for broader remedies under certain conditions than contracts in general comes as a result of several public policy implications inherent in insurance contracts. Insurance policies are adhesion contracts. Insurance companies typically use standardized forms, and there is no room for negotiation or approval of specific provisions or exceptions. See Douglas R. Richmond, Trust Me: Insurers Are Not Fiduciaries to Their Insureds, 88 KY. L.J. 1, 4 (2000); see also Geisfeld, supra ¶ 29, at 382; MARGARET N. KNIFFIN, 5 CORBIN ON CONTRACTS § 24.27 (Joseph M. Perillo ed., rev. ed., 1998) (“Disparity of bargaining power is likely to exist when a person applies for an insurance policy. The applicant usually has little or nothing to do with the authorship of the policy provisions. The applicant may not even read the policy, being discouraged by the number of terms and the fineness of print. An insurance company normally issues thousands of such policies, using printed forms prepared and approved by its actuaries, officers, and attorneys.” (footnote omitted)). ¶32 And, purchasing insurance is not always “voluntary.” Insurance coverage is often a requirement of obtaining a mortgage and is mandatory for drivers in Utah. See UTAH CODE § 31A-22-302 (requiring owners or operators to carry both no-fault and liability auto insurance). Also, rather than being strictly a commercial relationship, most “insureds purchase their policies for peace of mind and security rather than for financial gain.” Richmond, supra ¶ 31 at 4 (footnote omitted). ¶33 Because of these policy considerations, “this Court has expressed its commitment to the principle that ‘insurance policies should be construed liberally in favor of the insured and their beneficiaries so as to promote and not defeat the purposes of insurance.’” U.S. Fid. & Guar. Co. v. Sandt, 854 P.2d 519, 521 (Utah 1993) (citation omitted). This includes construing “ambiguous or uncertain language in an insurance contract that is fairly susceptible to different 16 Cite as: 2017 UT 81 DURHAM, J., concurring in part and in the result interpretations . . . in favor of coverage,” 5 id. at 522, and “in light of how the average, reasonable purchaser of insurance would understand the language of the policy as a whole,” id. at 523.