The Court of Appeal's recent decision in Turpin v.
The Manufacturers Life Insurance Company, 2013 BCCA 282, helps
bring certainty back to the interpretation of insurance policies
with respect to the application of the "reasonable
In Turpin, the Plaintiff had experienced abdominal pain
and sought medical treatment shortly before purchasing a travel
insurance policy. She then travelled to California and, within a
day of her arrival, again experienced abdominal pain and sought
treatment. The Plaintiff incurred significant medical expenses and
sought indemnity under her travel insurance policy. The claim was
denied on the basis of an exclusion for pre-existing medical
conditions. The trial court held that the policy was not ambiguous,
and that the Plaintiff's abdominal pain was a continuation
of a pre-existing condition. However, the court then went on to
find that, despite the Plaintiff not having read the insurance
policy, she had a reasonable expectation that she would have
coverage and, therefore, awarded the same.
The trial court decision brought uncertainty into the
application of the reasonable expectations principle in cases where
the insurance policy was otherwise clear in its exclusion of a
The Court of Appeal clarified that, in British Columbia at
least, "reasonable expectation" is not actually a
"doctrine", but merely an aid in interpreting an
insurance policy when construing an ambiguity. Therefore, the
reasonable expectations of the parties only become relevant where
the insurance policy is ambiguous. The court stated:
 I therefore have some misgivings as to the
trial judge's reliance on the Ontario authorities to
overcome an unambiguous exclusion in the policy. In my view, the
weight of authority, at least in this province, suggests that
nullification of coverage and the reasonable expectations of the
parties are not doctrinal concepts, but simply interpretive aids to
be invoked in the face of ambiguity, and directed to a resolution
that favours the insured.
As there was no ambiguity in the insurance policy present before
the court in Turpin, there was no need for the trial judge
to look to the reasonable expectations of the parties to determine
if there was coverage for the claim.
The court further clarified that, in cases where it is
appropriate to refer to the reasonable expectations of the parties,
the test for the reasonableness is objective. Therefore, the
subjective expectations of a particular plaintiff are not
The court concludes by stating that:
... I cannot agree that, because a travel
insurance policy clearly excludes coverage for pre-existing medical
conditions, coverage is nullified. This is a reasonable
and predictable exclusion, insurance remains in place under the
policy for many other medical risks and emergencies, as well as for
other exigencies encountered during travel.
This decision is a welcome clarification of insurance policy
interpretation and may signal a move away from the recent reliance
on the reasonable expectations of the parties to support a claim
for coverage under an insurance policy.
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