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The rule that interprets ambiguities in insurance contracts in favor of the insured is known as the doctrine of reasonable expectations. This principle holds that consumers are entitled to rely on their understanding of the insurance policy, including the belief that they are covered for risks that they reasonably expected to be included in the policy.

When there is ambiguity or vagueness in the terms of a contract, this doctrine prioritizes the perspective of the policyholder, looking at what a reasonable person in the insured's position would expect from the coverage. This approach is particularly important in fostering fairness in the insurance industry, as it protects consumers who may not have the same level of understanding or bargaining power as the insurance company.

The other concepts mentioned, such as the doctrine of utmost good faith, focus on the expectations of honesty and full disclosure between insurers and insured parties, while material misrepresentation deals with the consequences of providing false information when applying for insurance. Insurable interest refers to the requirement that the insured must have a legitimate interest in the risk being covered. Each of these concepts plays a role in the landscape of insurance, but the rule specifically addressing ambiguities in favor of the insured is rooted in the doctrine of reasonable expectations.