What is the purpose of fine print? Is it to save room on the page or is it to have the policyholder overlook important details?

Whether intentional or not, the way that insurance policies are worded is hard to understand.  This is incredibly unfair when considering the dominant role that insurance has in an ordinary Consumer's life.  A typical family of four could have 10 or more insurance policies (life, health, home, auto, disability, boat, travel, etc.).  Policies should be worded plainly so that the average person fully understands what is covered and what is excluded. 

An insurance policy is a contract.  The text of that contract is crafted by insurance company lawyers who are advised by actuaries, economists, statisticians, and other experts.  Consumers, for the most part, sign these contracts without legal advice, and are therefore always at a significant disadvantage.  Of course the insurance companies know this. 

Aside from confusing text, another common problem is where the Consumer buys a policy (enters into a contract), and subsequently the company decides to change the terms of the policy (amends the contract).  So now there are two documents: the original policy and the amendment. The Consumer has to figure out how the amendment modifies the original policy, and whether the amendment affects any other aspect of the coverage.  Over the course of a policy's term, there could be a number of amendments, and the Consumer is at the company's mercy in understanding how all the changes and documents relate to one another.

Too many important details are buried in the "fine print," such as what coverage is required, whether the lowest rate is being offered and if not why not, whether the deductible can be raised without your approval, or under what circumstances can an insurer suddenly cancel, or whether the company can raise your rates if you're not at fault, or what does "punitive damages" mean, or am I required to waive my right to a jury in a dispute with the company, or how long can the insurer hold on to your money after a claim is submitted? 

These are all areas that should be made plain.

This No Fine Print Initiative asks for the insurance industry's voluntary participation and cooperation in improving the way that policies are worded and explained to Consumers, not just once, but throughout the life of the policy.  The Advocate will reach out to industry leaders and other stakeholders to see if a reasonable consensus can be reached for reform in this area.