Let me help you read your insurance policy

The first step to filing a successful insurance claim is to understand your coverage, and whether it applies to your problem. The most obvious route to understanding coverage would be to read your policy. Yet many insurance policies are unintelligible.

The National Association of Insurance Commissioners (NAIC), which is the organizing body for state insurance commissioners, has decided to look into this. I think it should have looked into this decades ago, but nonetheless it’s “on the case” now.

The NAIC held a public hearing on March 28 to hear from its consumer representatives, insurance regulators and the insurance industry.

So in the spirit of “readability,” I will now interpret the NAIC’s list of questions (from its own press release) that the hearing addressed:

1. To which lines of insurance should readability standards apply?
Read: Should policies for every type of insurance be readable, or just some? How about just car insurance policies? Let’s not get too crazy here with readable policies.

2. Should an entire insurance policy be required to be scored?
Read: Should the whole darn policy be readable? Maybe just certain sections would be OK.

3. Should defined terms in a policy be included in the scoring process?
Read: Is it necessary for definitions to be understandable, like, say, who is the “insured”?

4. Should the readability standard score continue to be the current Flesch Reading Ease Score (a number from 0 to 100) or should it be changed to another measure (such as the Flesch-Kincaid Grade Level)?
Read: Err, this particular question isn’t readable without a solid background in reading stuff.

5. What other logistical questions are states likely to encounter if they move forward to revise their standards?
Read: Wait a minute, what are the repercussions of making policies readable? Will consumers then expect claims denial letters to be readable? Where does it end?!

NAIC, thanks for your attention to this matter. We look forward to hearing from you.