Concurring.
I join the opinion of the Court. I write separately only to emphasize the distinction between this case and Standard Venetian Blind Co. v. American Empire Ins. Co., 503 Pa. 300, 469 A.2d 563 (1983), which embodies Pennsylvania’s general practice of applying the “plain language” rule to construe exclusionary clauses in liability insurance contracts, instead of considering the “reasonable expectations” of the insured. Since Standard Venetian Blind was decided, it appears to me that Pennsylvania has created exceptions to the plain language rule which make that rule inapplicable to the facts now before us.
It now seems apparent that Standard Venetian Blind did not signal wholesale rejection of the reasonable expectations principle foreshadowed in Rempel v. Nationwide Life Ins. Co. Inc., 471 Pa. 404, 370 A.2d 366 (1977), expressed in Collister v. Nationwide Life Ins. Co., 479 Pa. 579, 388 A.2d 1346 (1978), cert. denied, 439 U.S. 1089, 99 S.Ct. 871, 59 L.Ed.2d 55 (1979), and reiterated in Tonkovic v. State Farm Mut. Auto. Ins. Co., 513 Pa. 445, 521 A.2d 920 (1987). Instead, I think Standard Venetian Blind did no more than reject the attempt of Hionis v. Northern Mut. Ins. Co., 230 Pa.Super. 511, 327 A.2d 363 (1974), to wholly divorce the construction of exclusionary clauses from their text. See id. (insurer has affirmative duty to explain the effect of all policy exclusions in precise, concrete terms without regard to the clarity of the language of the policy or the reasonableness of the insured’s expectations).
Thus, in Standard Venetian Blind, all members of the Pennsylvania Supreme Court agreed that Hionis’s failure to apply the *1316clear language of the exclusions of the general liability policy was inconsistent with the objective theory of contracts. The Hionis rationale would have covered insureds against risks as to which they had no reasonable expectation of coverage. Indeed, the majority in Standard Venetian Blind recognized the “manifest inequality of bargaining power between an insurance company and a purchaser of insurance,” reasoning that a court may on occasion deviate from the plain language of a contract of insurance. Standard Venetian Blind, Co., 503 Pa. at 307, 469 A.2d at 567. Accordingly, under Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), I think the Court correctly decides that the insured Township should be given an opportunity to pursue discovery for the purpose of uncovering evidence that would tend to show Bensalem was not sold the policy it asked International Surplus Lines to provide, was not advised that this “claims-made” policy left it without coverage for risks it wanted covered, or that the promises given were made largely illusory because of the restrictive way the exclusions the insurer relies on interact with the claims-made policy.
In the present ease, as in Collister, the Township claims that the policy it received was not the policy it wanted to buy and, most significantly, was led by the insurer to believe it was purchasing. The discovery the insured seeks is designed to support that allegation. Therefore, I believe the Court correctly decides that the Township should be given an opportunity to discover evidence that would support its theory that the policy it received did not cover risks it was reasonably led to believe would be covered.
This case is subject to much the same analysis that Justice Manderino used in his plurality opinion announcing the judgment of the court in Rempel. That analysis to my mind embodies an unobjectionable rule that an insurer should not be allowed to disclaim coverage after a loss occurred of a risk that its insured advised the company it wanted covered. Rempel, 471 Pa. at 410-12, 370 A.2d at 371.
Although the Pennsylvania Supreme Court in Standard Venetian Blind did not adopt the Rempel principle in its broad form, the antipathy the Rempel plurality expressed, to the failure of insurance companies to alert their customers to exclusions that are likely to remain hidden until a loss occurs, was reiterated, this time by a majority, in Collis-ter. As the Court points out, Collister took an important step towards the reasonable expectation standard when the Pennsylvania Supreme Court stated, “[cjourts should be concerned with assuring that the insurance purchasing public’s reasonable expectations are fulfilled.” Collister, 479 Pa. at 594, 388 A.2d at 1353. Furthermore, as the Court cogently demonstrates, this theme was continued in Tonkovic, the Pennsylvania Supreme Court’s most recent pronouncement on this matter, and thereafter in the decisions of the Pennsylvania Superior Court also cited in this Court’s opinion. See Majority Op. at 1308-09.1
*1317Accordingly, I agree with the Court that Pennsylvania would not, under the circumstances here, apply Standard Venetian Blind’s plain language rule to exclude Bensa-lem Township from the coverage it seeks if it can show that it reasonably expected such coverage. Instead, I think Pennsylvania would look beyond the strict technical language of this policy’s exclusion to determine what coverage the insured told the insurer it wanted to buy and whether the insurer reasonably led it to expect such coverage by the terms of the policy it tendered.
Accordingly, I join the opinion of the Court.
Before: SLOVITER, Chief Judge, BECKER, STAPLETON MANSMANN, GREENBERG, HUTCHINSON, SCIRICA, COWEN, NYGAARD, ALITO, ROTH, LEWIS, and McKEE, Circuit Judges.. Tonkovic, which can be analyzed in terms of an illusory promise, is relevant here because Bensa-lem Township's policy is a “claims-made" policy. As such, it limits coverage to claims filed within the policy's term. Standard Venetian Blind involved an "occurrence-made" policy which provided coverage for any covered event that occurred during the policy term, without regard to when the claim was made. See American Cas. Co. of Reading, Pennsylvania v. Continisio, 17 F.3d 62, 68 (3d Cir.1994) (discussing differences between claims- and occurrence-made policies). Claims-made policies allow the insurer to make a more precise calculation of premiums based upon the costs of the risks assumed, a calculation that is difficult, if not impossible, in an occurrence-made policy where the insurer is faced with tin unlimited "tail” of potential liability extending beyond the policy period.
In a claims-made policy, however, limitation of coverage to claims filed within the policy term can sometimes interact with broad exclusions like those present here to defeat the "reasonable expectations” of the insured or perhaps, in some cases, make the promised coverage illusory. See Tonkovic, 513 Pa. 445, 521 A.2d 920; Worldwide Underwriters Ins. Co. v. Brady, 973 F.2d 192 (3d Cir.1992). Pennsylvania’s exceptions to the plain language rule of Standard Venetian Blind seek to balance the relative advantages an insurance company has in underwriting claims-made policies with the insured's reasonable expectations of coverage. See Zuckerman v. National Union Fire Ins. Co., 100 N.J. 304, 495 A.2d 395 (1985) (for an excellent discussion of the discrete issues presented by claims and occurrence made policies). Still, if insurance is to serve its basic purpose of splitting economic loss that would be catastrophic to a single insured among a group *1317of persons facing similar risks, exclusion of coverage for losses that a particular insured is more or less certain to suffer is necessary. For who, as it was once said, would not give up a peppercorn in exchange for a pound and who, no matter how well endowed with pounds, could long continue such an exchange? The exclusions in question here may be meant to do no more than solve the problem of moral risk. Whether they go so far as to deprive the insured of the coverage it reasonably expected to receive remains to be seen.