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How are insurance contracts interpreted in North Carolina? | Legal insurance blog for property insurance



North Carolina is known as The Tar Heel State, and I am proud to call the University of North Carolina at Chapel Hill my alma mater. The official state bird is the cardinal and the flowering of the beautiful barley tree is the official state flower.

In North Carolina, courts apply general principles of contract law to the interpretation of insurance policies. "The interpretation of the language used in an insurance policy is a legal issue governed by well-established building regulations." 1

Under. . . North Carolina law, words in an insurance policy get their usual, common and generally accepted meaning where they are susceptible to such construction. Anderson v. Allstate Insurance Co. 1

45 S.E.2d 845 (N.C.1966); Graphic Art Mut. Ins. Co. v. C.W. Warthen Co. 397 S.E.2d 876 (Va.1990). When the court determines the usual construction of the word, courts often look at dictionary definitions. See Guyther vs. Nationwide Mut. Fire Ins. Co. 428 S.E.2d 238, 241 (N.C.App.1993); Van Sumner, Inc. v Pennsylvania Nat & # 39; l Mut. Casualty Ins. 329 S.E.2d 701, 703 (N.C.App.), Disc. turn. nekad, 336 S.E.2d 406 (N.C.1985); Hill v. State Farm Mut. Car. Ins. Co. 375 S.E.2d 727, 729 (Va.1989); Ayres vs. Harleysville Mut. Casualty Co. 2 S.E.2d 303, 306 (Va.1939). Otherwise, the courts look at the four corners of the policy, without resorting to external evidence, to determine whether a word or phrase is ambiguous. Wachovia Bank and Trust Co. against Westchester Fire Ins. Co., 172 S.E.2d 518 (N.C.1969); Nationwide Mut. Ins. v. Wenger 278 S.E.2d 874 (Va.1981). The language of a policy is ambiguous if it has two reasonable constructions. Van Sumner 329 S.E.2d at 703; Caldwell v. Transportation Ins. Co ., 364 S.E.2d 1, 3 (Va.1988).

If the language of the policy is unambiguous, a court must apply the terms of the policy as written. Wachovia 172 S.E.2d at 518; United Serv. Auto Ass & # 39; n mot Webb 369 S.E.2d 196 (Va.1988). On the other hand, if the language of an insurance policy is ambiguous, the insured must have the most favorable construction. Van Sumner 329 S.E.2d at 703; Caldwell 364 SE2d kl. 3. 2

The final game of the Court will be to determine the intention of the parties at the time the agreement was formed. 3 In order to determine the intention of the parties, the courts will first look at the simple and ordinary meaning of the insurance terms. If the conditions are unambiguous, strict construction applies. If the conditions turn out to be ambiguous – ie. the language of politics may be receptive to more than a reasonable meaning – then the court will interpret any ambiguity towards the founder of the agreement. Here is the reservation. In general, scrivener is the insurance company with greater bargaining power because the insurer provides the insured with the insurance and essentially tells the policyholder to "take it or leave it." However, some courts will consider the policyholder's sophistication and whether the policyholder has negotiated the policy terms outside the usual forms of real estate.

In North Carolina, courts largely apply the “general rule. . . that insurance contracts will be interpreted liberally for the benefit of the insured and strictly interpreted against the insurer, since the insurance company has chosen the language used in the insurance. 4 Policyholders in Tar Heel State may find it easy to know courts usually interpret ambiguities against the insurer to provide coverage and charge the insurer to prove an application of the insurance's limitations or exceptions.
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1 NC Farm Bureau, Mut. Ins. V. Mizell 530 S.E.2d 93, 95 (N.C. Ct. App. 2000).
2 Highway Exp. Inc. v. Fed. Ins. Co. 19 F.3d 1429 (4th Cir. 1994).
3 See e.g. Wachovia Bank & Trust Co. v. Westchester Fire Ins. Co. 172 SE2d 518, 522 (NC 1970) ("As in other agreements, the aim is to build conditions in the insurance policy to achieve the insurance cover to which the parties refer when the insurance was issued.
4 Mazza v. Med. Mut. Ins. Co ., 319 SE2d 217, 223 (NC 1984).


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