In our last post, we discussed some rules the courts use to interpret insurance policies. If the contract has language that is subject to more than one interpretation, it is considered to be ambiguous. In Oklahoma when an insurance policy has ambiguous language, we explained the courts construe the language in favor of the insured or the policyholder and against the insurance company.

However, this still does not answer the question of how you decide what the language means. It is one thing to say the language should be viewed favorably to the policyholder, but you still have to determine what should happen.

Oklahoma has adopted the “reasonable expectations test”. In simple terms, it is what a reasonable insured would have expected at the time he was purchasing the coverage. An insured buying disability insurance that has a clause which is ambiguous would not reasonably expect to have collision coverage for his vehicle.

The courts have used the “reasonable expectations test” as a means of protecting insurance companies from having their contract rewritten to the point where it would be unfair and unreasonable. The courts have made it extremely clear that it is not their job to rewrite an ambiguous insurance contract, it is merely their responsibility to interpret the language of the policy when the parties otherwise disagree.