ILLEGAL UNDERINSURANCE AND CONTRA PROFERENTEM INTERPRETATION OF THE INSURANCE CONTRACT

This decision of the Corte de Apelaciones de Coyhaique is relevant from two points of view: on the one hand, it determines that the “replacement value” of the insured thing instead of its real value cannot be agreed as a parameter to determine a situation of underinsurance and the application of the Proportional Rule, as this would infringe the meaning of the mandatory rule of art. 553 of the Chilean Commercial Code. On the other hand, it constitutes an opportunity to appreciate a situation of incompatibility of clauses, a field of application of the rule of contractual interpretation contra proferentem. In both cases, the court considers the protection of the insured as paramount in determining the meaning of insurance law.