A complete and open embrace of the pure version of the doctrine as enunciated in Judge Keeton's famous article--which expressly provides for finding coverage consistent with the objectively reasonable expectations of the policyholder even where those expectations are contradicted by apparently clear policy language --is viewed by much of the legal and political mainstream as too inconsistent with the prevailing American paradigm of judicial restraint, strict construction of disputed texts, and minimal government involvement in market activity. Some of this resistance to reasonable expectations is the product of an unrealistic reification of the prevailing American politico-legal philosophy of judicial restraint. Some of the resistance results from legitimate concerns about judicial lawmaking less tethered to text (of insurance policies, contracts, statutes, treaties, or documents in general). But although excessively reified and deified, the judicial restraint paradigm is unlikely to shift significantly unless American society incurs radical change. The resilience of the judicial restraint construct is understandable in that, for the most part, it has proven sound and apt for the American system.
Properly seen, however, the reasonable expectations doctrine, even in its strong “rights at variance” form, is actually consistent with the prevailing jurisprudential ethos because of the context of insurance coverage. Determining the “correct” meaning of an insurance policy inevitably requires not only a sharp focus on policy text but also full consideration of the reasonable expectations of both insurer and insured, even where those expectations to some extent run counter to the text and certainly where text is unclear, insufficiently certain, or applied to unanticipated situations. Contrary to the assertions of some courts and commentators, strong judicial invocation of the reasonable expectations concept poses no threat to separation of powers and little serious obstacle toward vindicating the intent of the parties to the insurance contract and the purpose of the insuring agreement.
5 Conn. Ins. L.J. 181 (1998).
Stempel, Jeffrey W., "Unmet Expectations: Undue Restriction of the Reasonable Expectations Approach and the Misleading Mythology of Judicial Role" (1998). Scholarly Works. Paper 208.