How Insurance Brokers Can Help You Cut Through Legal Jargon
Trying to decipher the small print in insurance policy documents can often feel like reading a different language. As a recent study has shown that insurance policies require education to at least A-Level to be understood by the average person, our Operations Director Andy Jenkins discusses how insurance brokers can help with cutting through the jargon.
The University of Nottingham, in collaboration with law firm Browne Jacobson, has carried out a detailed academic study into the readability of insurance policies, which shows that people routinely find it difficult to understand insurance documents.
The study found that all the policies reviewed required education to at least A-level, and in most cases graduate or post graduate level, in order to be meaningfully understood. It found that policyholders had difficulty in understanding what was and wasn’t covered, with comprehension ranging from between 32% and 66%. The least readable policy tested could only be meaningfully understood by 13.4% of participants.
However, the study also found that it was possible to significantly improve the readability of policy documents, reducing the reading age of one policy by 10 years from doctorate level to that of a Year 8 pupil. This increased the percentage of the UK population that could understand the policy by 75%, from 13.4% to 89%.
Andy Jenkins said: “People often forget when they take out a new insurance policy they are signing a legal contract and most policies come with terms and conditions, which include terminology they aren’t used to. Policy documents have to be written in a certain way because they are legal documents and do rely on insurance terminology from a legal perspective. But, for many people, the language can be quite complicated and hard to understand. How many times do people agree to something without properly reading the terms and conditions? It’s because they are both long documents and difficult to read.”
With literacy skills in the UK predicted to decrease over time, an increasing number of the UK adult population struggle to understand insurance policy documents. The study stresses the importance of insurers taking this into account.
Andy added: “Most people will look online for various insurance policies because they can get a cheaper deal, however cheaper premiums often bring limitations in terms of cover. To use the example of car insurance, how many people could afford to replace a written-off vehicle because their motor insurance policy was not responding as they hadn’t clearly read their policy wording and therefore weren’t clear on what they were covered for? Just as you employ an accountant for your accounts and a lawyer to deal with your legal issues, an insurance broker is there to help you deal with your insurance policies. We speak insurance and translating complex documents is part and parcel of what we do for our clients.”