1.4 Interpretation Based on the Understanding of the Ordinary, Average, or Reasonable Person

• Jurisdiction: Arizona

In ascertaining the meaning of an insurance policy, the court will review the policy language used from the standpoint of the average person who is untrained in either law or insurance,^[38] taken in context with the average person's knowledge of the way insurance works and is set up.^[39] This is an objective determination; a particular insured's interpretation of the policy is not controlling.^[40] This rule of construction applies with greater force where the court is interpreting a policy exclusion.^[41]

Where a coverage dispute arises between two insurance carriers, the court may consider "commercial customs" in the insurance industry in ascertaining the meaning of the policy language used.^[42]

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Notes:

[38]Sparks v. Republic Nat'l Life Ins. Co., 132 Ariz. 529, 647 P.2d 1127, cert. denied, 459...