Opinion ID: 2611826
Heading Depth: 4
Heading Rank: 2

Heading: Principles Governing Interpretation of Insurance Policies

Text: (5) While insurance contracts have special features, they are still contracts to which the ordinary rules of contractual interpretation apply. ( Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264 [10 Cal. Rptr.2d 538, 833 P.2d 545]; see AIU Ins. Co. v. Superior Court (1990) 51 Cal.3d 807, 821-822 [274 Cal. Rptr. 820, 799 P.2d 1253].) The fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties. (Civ. Code, § 1636.) ( Bank of the West v. Superior Court, supra, 2 Cal.4th at p. 1264.) Such intent is to be inferred, if possible, solely from the written provisions of the contract. ( AIU Ins. Co. v. Superior Court, supra, 51 Cal.3d at p. 822.) If contractual language is clear and explicit, it governs. (Civ. Code, § 1638.) ( Bank of the West v. Superior Court, supra, 2 Cal.4th at p. 1264.) Moreover, if the policy's terms are `used by the parties in a technical sense or a special meaning is given to them by usage,' this use or meaning controls judicial interpretation. ( AIU Ins. Co. v. Superior Court, supra, 51 Cal.3d at p. 822.) `An insurance policy provision is ambiguous when it is capable of two or more constructions, both of which are reasonable.' ( Bay Cities Paving & Grading, Inc. v. Lawyers' Mutual Ins. Co. (1993) 5 Cal.4th 854, 867 [21 Cal. Rptr.2d 691, 855 P.2d 1263], italics omitted; Producers Dairy Delivery Co. v. Sentry Ins. Co., supra, 41 Cal.3d at p. 912.) Courts will not adopt a strained or absurd interpretation in order to create an ambiguity where none exists. ( Reserve Ins. Co. v. Pisciotta (1982) 30 Cal.3d 800, 807 [180 Cal. Rptr. 628, 640 P.2d 764].) `[L]anguage in a contract must be construed in the context of that instrument as a whole, and in the circumstances of that case, and cannot be found to be ambiguous in the abstract.' ( Bank of the West v. Superior Court, supra, 2 Cal.4th at p. 1265, italics omitted; New York Life Ins. Co. v. Hollender (1951) 38 Cal.2d 73, 81 [237 P.2d 510] [In construing insurance contracts, the entire contract is to be construed together for the purpose of giving force and effect to each clause.].) If an asserted ambiguity is not eliminated by the language and context of the policy, courts then invoke the principle that ambiguities are generally construed against the party who caused the uncertainty to exist (i.e., the insurer) in order to protect the insured's reasonable expectation of coverage. ( Bay Cities Paving & Grading, Inc. v. Lawyers' Mutual Ins. Co., supra, 5 Cal.4th at p. 867; AIU Ins. Co. v. Superior Court, supra, 51 Cal.3d at p. 822; Producers Dairy Delivery Co. v. Sentry Ins. Co., supra, 41 Cal.3d at p. 912.)