What does the concept of reasonable expectations imply for customers?

The concept of reasonable expectations suggests that customers are entitled to expect coverage based on the representations made by their insurance agents during the sales process. This principle acknowledges that consumers may not fully understand the intricacies of insurance policies and therefore rely heavily on the information and assurances provided by agents.

When an agent provides information or guidance about the coverage, customers form expectations about what they are purchasing. The reasonable expectations doctrine thus protects consumers by ensuring that they can hold insurers accountable for the coverage they believed they were obtaining based on those representations. Therefore, if an agent implies that a certain type of coverage is included as part of the policy, the customer can reasonably expect that this coverage will indeed be part of their policy, even if it is not explicitly named in the written document.

By contrast, expecting minimum coverage or requiring customers to verify every statement made by an agent could place an undue burden on them, especially considering the complexity of insurance products. Also, the notion that customers only receive explicitly stated coverage dismisses the importance of agents’ roles in clarifying what is included and aligns with how insurance is often marketed and sold. Thus, the emphasis on implied coverage during the sales process is significant in safeguarding customer interests.