Cryptic Policies Confounding Drivers

Customer service is always of critical concern to insurance carriers, but perhaps one area that they may be overlooking is whether or not the wording of policies is intelligible to the average American consumer.

And, according to a recent InsuranceQuotes.com survey, this may already be a growing problem. The online poll, conducted by Harris Interactive, found that more than one-third of insured American drivers who have read at least part of their auto insurance policies have had trouble deciphering them.

The survey revealed that 87% of drivers who currently have auto insurance said they had read at least some of their auto insurance policies, but that 36% of those drivers complained that their auto insurance policies were somewhat or very difficult to understand.

Despite the fact that greater than 30 states have enacted laws intended to simplify policy language, the online quote aggregator says that many consumers are confused by how their policies are written, and struggle to determine what's covered and what's not.

Many consumers still have trouble recognizing the difference between comprehensive and collision coverage.

“If you ask someone what comprehensive means, they think it’s everything, but it only covers certain damages to your car,” says Robert Hunter, insurance director at the Consumer Federation of America, adding that even policies written in plain English are above the average person’s grade level.

The online survey was conducted from Feb. 24-28, 2011, among 2,366 adults aged 18 and older—2,107 are current drivers, and 2,079 currently have auto insurance.

For more information about the poll and the readability of insurance policies, click here.

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