Law Professor, Jeffrey E. Thomas, has posed a question that has been in the back of my mind for some time: Is The Reasonable Expectations Doctrine Dead? The topic and question has a very personal impact upon me. In 1982, I wrote my doctoral thesis on this insurance coverage theory. I wrote about "The Innocent Co-Insured: A Calling for Reasonable Expectations." I will see if I can find it somewhere and post it for those who may want to get some deep slumber.
Professor Thomas correctly noted that the theory stands for the following proposition, supported by the late Harvard Law Professor Keeton in his thesis, Insurance Law Rights at Variance With Policy Provisions, 83 Harv. L. Rev. 961, 961 (1970)
With a focus limited to insurance cases (though surely it applies in other contexts as well), this principle may be stated in the following way:
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.
Although too general to serve as a guide from which particularized decisions can be derived through an exercise of logic and too broad to be universally true, this principle points in the direction insurance law appears to be moving. It is also, I submit, a principle that insurance law ought to embrace.
This was not a traditional legal theory at the time. Many states and judges started adopting it, however. Today, Professor Thomas notes that some studies have indicated that only two states are arguably following this coverage methodology. It is obviously a legal theory in decline.
I have found that most trial and appellate jurists simply do not follow the test. Indeed, my impression is that they find it almost repulsive to a conservative mindset. Accordingly, I rarely use that coverage theory for interpretation in my practice. My clients want to win. When arguing my position to a court, if I sound like some crazy liberal resorting to a last ditch theory of insurance coverage interpretation rather than advocating with the more traditional tests of insurance contract interpretation, I find that I lose.
So, for me, the reasonable expectations doctrine has been dead in practice and practical application for quite some time. While I may find that the doctrine academically explains what some jurists resort to when deciding legal issues of insurance coverage interpretation, few will acknowledge it. If I can explain why my interpretation is correct under various traditional legal concepts of insurance contract interpretation, I find that I win much more often than even mentioning a legal theory many judges simply will not follow.