When there is a dispute involving coverage under a liability policy, the insured person has the burden to bring the claims within the basic terms of the policy. Coverage depends on the terms of the insurance policy, and because the policy is a contract, its interpretation is a question of law.
There are well-established rules on construction that guide the interpretation of insurance contracts. Clauses in an insurance contract which define coverage are interpreted liberally, but clauses narrowing coverage through exclusions are strictly construed. Courts have ruled that when an insurance policy is sufficiently ambiguous to permit readings excluding and providing coverage, the interpretation supporting coverage will be applied. Our New Jersey Supreme Court, in a case called Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 247 (1979), indicated that “[A] genuine ambiguity” warranting application of that rule arises “where the phrasing of the policy is so confusing that the average policyholder cannot make out the boundaries of coverage.” In President v. Jenkins, 180 N.J. 550, 563 (2004), our New Jersey Supreme Court indicated that faced with genuine ambiguity, courts resolve it “to comport with the reasonable expectations of the insured.” Meanwhile, as our Appellate Division has ruled in a case called Simonetti v. Selective Ins. Co., 372 N.J. Super. 421, 428 (App. Div. 2004), “[w]hen the terms of the contract are clear and unambiguous, [courts] must enforce the contract as it is written; the court cannot make a better contract for parties than the one that they themselves agreed to.”