Professor Jeffrey Stempel’s scholarship has always had a knack for shaking up how we think about insurance law. His article, The Insurance Policy as Thing, 1 originally published in the Tort Trial & Insurance Practice Law Journal, continues that legacy by challenging a legal habit so entrenched we rarely stop to question it. He questions the idea that an insurance policy is just like any commercial contract. Stempel convincingly argues that this view is not only incomplete but also dangerously misleading when it comes to understanding how insurance truly operates in the real world.
He makes the case that an insurance policy is far more like a product. It is a far more standardized, mass-produced “thing” that is bought and sold, and not a bespoke agreement negotiated by equal parties. Insurers draft the language, regulators approve it, and consumers purchase it largely on faith. The transaction feels less like a handshake deal and more like buying an appliance off the shelf. You expect it to work as advertised, not to discover hidden disclaimers when you try to use it. Stempel’s point is that courts and lawyers should interpret policies with that reality in mind.
By viewing insurance policies as products, not just contracts, Stempel opens the door for a more honest, practical, and fair approach to coverage interpretation. It acknowledges that most policyholders lack the power or expertise to haggle over the fine print. They’re purchasing peace of mind. Insurance is functioning as a protection device, not a maze of exclusions. This lens makes the law less about parsing clauses and more about fulfilling the purpose for which insurance exists: to transfer and spread risk so that individuals and businesses can move forward after disaster strikes.
What’s refreshing about Stempel’s work is that he doesn’t stop at theory. He uses examples that every coverage lawyer recognizes. He notes the “visible marks of burglary” cases, pollution exclusions stretched to absurdity, and the endless debates over policy period limits. Through these examples, he demonstrates how a “policy-as-product” perspective leads to outcomes that make sense both commercially and morally. It’s the kind of pragmatic insight that reminds us why his writing remains essential reading for anyone serious about how to interpret insurance contracts, from someone who has been studying this his entire life.
I first ran into Stempel when he was a practicing lawyer arguing a Hurricane Katrina case. I was fascinated by his technique of breaking down clauses in his briefs. He later became a law professor at Florida State University and then moved to the University of Las Vegas. I wrote about him earlier this year in Deeper Analysis of How to Interpret Insurance Policy Language—Where Insurance Coverage Nerds Go for the Weekend. I also noted Professor Stempel in other posts, including Leading Insurance Academic Proves State Farm Accepts “Reasonable Expectations” of Insurance Coverage.
In my next post, I’ll continue exploring Stempel’s ideas and tackle another major theme in his article: what it means for judicial interpretation and fairness when courts take the product nature of insurance seriously. This one’s worth digging into.
For our readers, I try to publish something every day. On Saturday, I caught an awful cold while racing on the Chip’s Ahoy! Still have not shaken it, but wanted to get what has been on my mind for several days.
Cheers!
Thought for the Day
“We shape our tools and thereafter our tools shape us.”
—Marshall McLuhan
1 Jeffrey W. Stempel, The Insurance Policy as Thing, 44 Tort Trial & Ins. Prac. L.J. 813 (Spring/Summer, 2009).