Are Insurance Policies Still Contracts

David F. Tavella

Abstract

This article examines whether courts still treat insurance policies as contracts. Since the inception of insurance, policies have been deemed contracts, and general principles of contract interpretation have been used to interpret policies. However, more and more courts are abandoning contract principles when interpreting insurance policies, particularly using parol evidence to determine whether a policy provision is ambiguous, or even using parol evidence to interpret the meaning of unambiguous policy terms. My conclusion is that insurance policies, while still generally considered “contracts,” are treated differently then other contracts, and in reality are not seen as true contracts.