When looking at insurance claims, Wisconsin uses a reasonable expectations doctrine. This can be controversial at times.
The goal of the doctrine is simply to uphold the obligations that the insurance policyholder would reasonably expect from that policy. But the controversy comes at times when a person’s reasonable expectations are clearly at odds with the language in the policy itself. There have been cases where, despite the clear language, the court will rule in favor of the policyholder.
The definition of burglary
One example of this is an insurance policy that defined burglary as a forceful and felonious entry of a person’s property that left physical damage on the exterior of the building.
There was a case where no visible damage was found on the exterior of a person’s home. Instead, the only damage was inside the building.
Strictly speaking, the language of the policy could mean that the insurance claim would be denied. The insurance company could note that the person was not covered for property that was stolen or damage that was incurred because of this lack of exterior marks, which was clearly laid out in the policy itself.
However, a court found that a person’s reasonable expectation was that their home insurance policy would cover the damages from a burglary. They also noted that the legal definition of burglary was different from that contained in the insurance documentation and that a layman’s definition of burglary would also not match up with this strict definition. As such, the court ruled in favor of the policyholder, saying that they should be insured.
Navigating a complex situation
This is just one example of how courts have sometimes interpreted insurance contracts and obligations. Policyholders in Wisconsin need to know exactly what legal rights they have and what steps to take if a disagreement should arise.