There are many mistakes that people do and one of them is not reading our insurance policies. This can be a complicated subject and it is understandable why many consumers choose not to read insurance policies. Contracts are usually drafted by an insurance company and there’s little possibility of changing the terms once they have been printed. For the most part, we simply need to purchase products off the shelf. It means that consumers should be fully committed to the policy holders and they should keep their promise to continue paying. Insurance contracts should give an idea what’s provided and what we get may be actually very different, depending on our situation.
This could happen when a claim isn’t fully insured. Consumers may also have different idea about what’s promised in the contract. There could also be disputes related to third parties and insured people. The problem of not reading the policy doesn’t only involve the consumers, but also brokers and agents. It means that we shouldn’t assume that our broker and agent have read the policy. Insurance agents could also make mistake thinking that if a specific insurance products are designed for specific consumers or niche industry, they will certainly satisfy customers. But unfortunately, nothing could be further from the truth. A company may have specific endorsement and consumers may also have a different idea about things that should be provided.
Even for an insurance professional, understanding and reading insurance policy is actually a tedious and time-consuming endeavour. For this reason, it is possible that agents won’t take the time to properly read the policy, due to the overall competitive nature of the business. After all, consumers also don’t look at the terms of the policy. Just like any buyer, insured individuals tend to focus on policy premiums and they often work with agents to reduce the amount of premiums that they need to pay. They may consider that the process has worked rather well and everyone will be happy, until there’s a dispute associated with the coverage. In this condition, consumers may think that the agent has done a marvellous job in saving their money. Unfortunately, when there’s a dispute associated with the policy, the amount of money that we save may actually become meaningless.
Insurance is often considered as a commodity, just like flour and sugar. In general, we need to insure employees, 3rd party liability, loss of income, health, property, vehicles and other aspects in our lives. Because insurance is intended to protect important aspects of consumers’ lives, we need to read policies carefully. If we don’t agree with the terms, it is important for us to avoid making an agreement with the insurer. In any case, it is important to make sure that we are comfortable with the terms and risk assessment. We should know what may or even will happen to us, to determine whether the insurance policy can protect us financially. We can do this only by reading the contracts carefully.