Excluding Exclusions: The Role of Reasonableness in the Interpretation of Insurance Policies


By Nigel Kent

Published 2011

Over the past 25 years, the doctrine of reasonable expectation of the parties regarding the interpretation of insurance provisions has undergone a dramatic shift in application by Canadian courts. What began as a limited and narrowly applied doctrine in 1984 in Wigle et al. v. Allstate Insurance Co. of Canada, (1984) 49 O.R. (2d) 101 (C.A.), has evolved into a tool for which insured parties may rely upon to avoid clearly stated contractual provisions in insurance policies. Three recent 2011 decisions in provincial superior courts in Ontario and British Columbia, demonstrate that this doctrine may have major ramifications for the future interpretation of insurance contract provisions. In this paper, the history of this doctrine, which has its roots in American case-law, will be traced up to the most recent application in Canadian jurisprudence.

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