Insurance policies are classified as a subspecies of contract. Although the taxonomy is correct, rigid adherence to this classification system limits the legal system's ability to deal with some of the most problematic and frequently litigated questions of insurance coverage. Restricting conception of insurance policies to the contract model unduly limits analysis of the meaning and function of the policies. In addition, restricting characterization of insurance as a matter of “contract” does not necessarily produce swift, inexpensive, efficient, or uniform decisions (to say nothing about accuracy, justice, or fairness). Within contract law, scholars, and courts differ over the respective primacy of text, party intent, contractual purpose, extrinsic evidence, policyholder and insurer expectations, and public policy in determining interpretative outcomes. Even where interpreters focus on a single dimension of the meaning of contract (e.g., the text of the contract documents), they often disagree both as to the meaning of the text in question and over the general approach to construing text (e.g., broad versus narrow, plain meaning versus ordinary meaning, etc.).
The contract model is not the only lens through which to view and assess insurance. One may also profitably view insurance policies as akin to statutes. This Article attempts to move toward sounder construction and application of insurance policies and to improve the resolution and consistency of disputes over insurance coverage by expressly applying the notion that insurance policies are quite similar to statutes regulating the activity, expectations, and conceptions of insurers and policyholders when insurance is purchased, at least for common insurance products and situations. Fully appreciating this trait of the insurance policy and the insurance relationship can assist courts in better determining the contours of coverage in disputed cases.
41 McGeorge L. Rev. 203 (2010).
Stempel, Jeffrey W., "The Insurance Policy as Statute" (2010). Scholarly Works. 236.