1.2 Interpreting Policy Language

• Jurisdiction: Arizona

The intention of the parties controls the construction and interpretation of insurance contracts.^[18] The cardinal principle of interpretation is that the intent of the parties to the contract is to be derived from the policy language.^[19] Intent, as derived from the policy language, will prevail in any coverage dispute.^[20] Intent is divined from a review of the entire policy and the "surrounding circumstances," and not from the label the parties attach to the policy.^[21] The unexpressed intent of either party may not be given effect over their expressed intent. "[I]t is not the undisclosed intent of the parties . . . with which [the court] is concerned, but the outward manifestations of their assent."^[22] Judges will not attempt to read the minds of the parties to determine what they must have meant with regard to the insurance policy.^[23]

The Arizona courts have developed practical...