Dec Page March

Question of the Month

Much attention has been given in legal circles to the doctrine of reasonable expectations when it comes to coverage disputes between insureds and insurers. This doctrine holds that the objectively reasonable expectations of applicants and intended beneficiaries regarding the terms of insurance contracts will be honored even though painstaking study of the policy provisions would have negated those expectations. The doctrine, now more than thirty years old, has been considered in at least twenty-five jurisdictions and adopted in at least ten states.

But, does this mean that the insured will automatically have every loss covered just because he expects it to be covered? Are there any restrictions placed on the scope and extent of this doctrine? Which courts have accepted this doctrine and which have declined to adopt it? Do advertising brochures affect the application of the doctrine by creating reasonable expectations on the part of the insured that reads those brochures and is then induced to purchase the insurance policy?

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