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Seldom do we understand some of the mumbo jumbo in policy statements and contracts insurance policies that we avail of. However, the insurance law regularly provides that should there be a vagueness or uncertainty in a policy, whether in the choice of words or meaning, should be resolved favoring the policyholder and against the insurer. But if there's no unclear content in the coverage and the policy is clear and explicit, the clear meaning will be enforced.

Judges and courts interpretation of insurance contracts largely depend on what the clients' objective expectations are of the policy, reasonably. But personal expectations of the policy holder and are not reasonably supported by the contents of the contract is unenforceable.

The term "limits" refers to the amount of insurance coverage. It is ruled that exceptions and limitations in a policy must be explained clearly in a language that's understandable for all. This is so in order that there will never be denials of coverage. As such, insurance policy's exclusions and limitations are always narrowly or strictly interpreted. Whenever there is a muddle over multiple meanings of exclusions or limitations, the court has to interfere to give the narrowest explanation.

So, why are we giving these bits of details regarding insurance policies to you? Its' because that we'd like for you to know what to do if you, as a policyholder, have any lack of knowledge or misunderstanding with regards to the insurance policy you've taken. Results like loss of benefits or forfeiture of rights, loss of benefits. You must know that as an insured, an insurer is required to bring to your attention some relevant information. It will also enable you to take action and secure the rights provided by the policy.

It is unfortunate that an insurance agent is not obligated to advise a policyholder on the adequacy of the limits of coverage selected by the policy holder. There are also other ways wherein insurer can do a breach of contract or violated the covenant on good faith and fair dealing. One of the situations wherein this act of bad faith happens is when insurance policy has provisions that are extremely in favor only with the company and when company used advertising and solicitation materials that are unfair or deceptive.

If you find out that the insurer has committed breach of contract and/or breached the covenant of good faith and fair dealing, you can recover all damages caused by the breach. Damages may be in the form of consequential losses, loss of use of the insurance proceeds, general damages, attorney's fees and punitive damages. If you're recovering from emotional distress and you may also recover damages for emotional distress.

In filing a suit for a bad faith case, there's a statute of limitations that vary from state to state. In order that your case won't be barred for trial, know the duration period of the statute of limitations and be able to file on time. -30-

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