How do courts typically handle ambiguous wording in insurance contracts?

When courts encounter ambiguous wording in insurance contracts, they typically adopt a principle known as "contra proferentem." This legal doctrine holds that any ambiguity in a contract should be interpreted in favor of the party that did not draft the agreement, which in the context of insurance contracts is usually the insured. This approach is based on the understanding that insurance policies are often complex and may contain technical language that the average policyholder might not fully comprehend.

Thus, when interpreting ambiguous terms, courts aim to protect the rights of the insured, ensuring they receive the coverage that a reasonable understanding of the contract's wording would suggest. This practice helps to promote fairness and protect consumers, who may be at a disadvantage compared to the insurer in terms of knowledge and resources.

The other options do not align with this established practice. Insurers typically cannot benefit from ambiguous language that they created, and simply enforcing the contract as written may not serve justice when the wording is unclear. Similarly, voiding the contract entirely would not generally be a measured response to ambiguity; courts prefer to resolve uncertainties rather than invalidate contracts.