The main reason for confusion surrounding Insurance Policies may be surprising. Insurance requires the use of what we call policies. Policies are essentially a promise delivered through the use of a legal contract. A legal contract that is intended to pay for a myriad of claim scenarios and circumstances. These contacts must therefore cover a broad range of diverse situations Continue Reading

Insurance requires the use of what we call policies. Policies are essentially a promise delivered through the use of a legal contract. A legal contract that is intended to pay for a myriad of claim scenarios and circumstances.

These contacts must therefore cover a broad range of diverse situations and navigate conditions following a loss. Policies must provide clear distinctions about:

Insurance contracts of all stripes have evolved through time, experience and case law. Though companies have tried to write them in more understandable language, they must be crafted in such a way as to stand up to legal scrutiny, compliance with state statutes and provide the benefits expected.

In addition, insurance policies are considered " contracts of adhesion " , meaning that the insurance company (insurer) controls the creation of the document. The purchaser (insured) only has the power to refuse it. Because of that relationship, grey areas in the contract's language will fall in the favor of the insured .

It is ironic, but due to all the above:

is the main reason that insurance is so “confusing”.