In the case of Fire Insurance Association, Limited v. Wickham in 1891, the U.S Supreme Court was tasked with deciding on a matter concerning insurance law and contract interpretation. The dispute arose when Mr. Wickham's property was destroyed by fire and his insurer, Fire Insurance Association Limited refused to pay out his claim based on their interpretation of the policy terms regarding 'actual cash value'. They argued that depreciation should be deducted from replacement cost to determine actual cash value while Mr. Wickham contended that it meant full replacement cost without deduction for depreciation. The court ruled in favor of Mr. Wickham stating that unless explicitly stated otherwise within an insurance policy, 'actual cash value' is generally understood as being equivalent to replacement cost without any deductions for depreciation or wear and tear at time of loss; thus obligating insurers to fully indemnify insureds up to policy limits for covered losses.

In the dissenting opinion for the case of Fire Insurance Association, Limited v. Wickham, it was argued that a contract made in one state should be enforceable in another if it is legal where it was made and not contrary to any policy or law of the second state. The dissenting justices believed that there were no grounds for denying enforcement of such contracts based on public policy considerations as long as they did not violate any specific laws. They also disagreed with the majority's interpretation of insurance policies being mere offers until accepted by performance, arguing instead that these are binding contracts once premiums have been paid and policies issued. Furthermore, they contended that an insurer who issues a policy knowing its terms cannot later deny liability under those same terms simply because they might contravene local regulations elsewhere.