Does the occurrence fit the description of the risk specified in the insurance contract? The interpretation of the language used to convey risk is another example that must be resolved.
Thus, with policy claims, it is quite often the case that expert evidence will be required to assist the court on the insurance market’s understanding and meaning of certain words in the risk clause.
However, as it is a matter of interpreting the legal effect of the words, the court has the ultimate decision on what the words mean at law.
The same considerations apply with respect to “peril clauses”. “Peril clauses” are clauses that specify the events which will not be insured against by the insurer. As a result, the insured will have to bear the loss if the “peril” occurs.
For example, your insurance may specify that the insured will be covered forr all the losses suffered by fire. Now the same insurance may also state under “peril” that the insured must bear any loss which arises from a earthquake.
Therefore under this insurance, the insurer will pay out for all damage losses caused by fire, but not for any loss due in case of an earthquake.
In summary
Ways an insurance policy can be mis-sold to you