Section 4.6 Doctrine of Reasonable Expectations

• Library: Insurance Practice 2015

The reasonable expectations doctrine provides that, regardless of whether the language employed is ambiguous or unambiguous, a policy of insurance, being a contract of adhesion, will be given effect according to the reasonable expectations of the parties. Robin v. Blue Cross Hosp. Serv., Inc., 637 S.W.2d 695, 697 (Mo. banc 1982); Estrin Constr. Co. v. Aetna Cas. & Sur. Co., 612 S.W.2d 413 (Mo. App. W.D. 1981); Spychalski v. MFA Life Ins. Co., 620 S.W.2d 388 (Mo. App. W.D. 1981). In applying this standard, the courts may consider any extrinsic evidence that may help them to determine the reasonable expectations of the parties, including ambiguity of the language, general knowledge of the content of the policy, and whether the policyholder may have read the insurance contract. Estrin, 612 S.W.2d at 426.

Several subsequent cases have expounded on the doctrine of reasonable expectations. Noteworthy are decisions that have held that the doctrine is not applicable when the parties to the insurance contract occupy equal bargaining positions, Schnuck Mkts., Inc. v. Transamerica Ins. Co., 652 S.W.2d 206, 211 (Mo. App. E.D. 1983), or if the insurance policy is, in fact, a product of negotiations between two parties, Rodriguez v. Gen. Accident Ins. Co. of Am., 808 S.W.2d 379, 382 (Mo. banc 1991); Wright v. Newman, 598 F. Supp. 1178 (W.D. Mo. 1984), aff’d, 767 F.2d 460 (8^th Cir. 1985). The objective reasonable expectations doctrine should not be applied in a case where the insurance policy is unambiguous. Killian v. State Farm Fire & Cas. Co., 903 S.W.2d 215, 218 (Mo. App. W.D. 1995).

Lawrence v. New York Life Insurance Co., 649 S.W.2d 461 (Mo. App. W.D...