Insurance contracts are not drafted with the goal of providing clarity to the insured/policy holder.  The “accept” button you push when you update licensing agreements with Apple or other software providers do not give you the ability to negotiate the terms of the agreement.  These are called contracts of adhesion or unilateral contracts.  Insurance contracts fall into the same categories.  The critical terms or words in these contracts are given their own definitions and can be described as a term of art .    As a result, these unique definitions are often dissimilar to the words common meaning.  This leases even the college and advance degreed policy without a meaningful understanding of the insurance contract.

Money hangs in the balance when an insurance claim is filed and hence contract insurance contracts are one of the most litigated contracts in American Jurisprudence.

A few pieces of information to keep in mind when purchasing insurance or filing for a claim:

  1. Unfortunately. DO NOT rely on secondary source (Glossy brochures entitled “Summary Description”, “Highlight of benefits” “Benefits at a Glance” that have no legal binding effect on the insurance company and purely for marketing purposes) information to gain an understanding of the contents of your insurance policy/contract.  DO NOT rely on marketing information in purchasing an insurance policy or as a prelude to filing a claim.
  2. Insurance agents can be a wonderful source of information but the inherent conflict is that YOUR agent’s commissions come from the insurance company.  Insurance companies pay the commissions of brokers/agents not you the policyholders.   It is the old adage “who butters your bread?”.
  3. Insurance law is regulated and enforced by State. So when you perform your own internet due diligence on a coverage issue, prior lawsuits involving the same insurance company and the like be sure to add the State the insurance policy was issued/entered into.
  4. Every State has an Insurance Commissioner that you can contact with questions.
  5. Any and all communications with an insurance company should be reduced to a written communication.  Resist the temptation to “hash out” a claim, premium or converge issue over the phone.  Particularly when filing a claim, write the insurance company a letter questing that all communication be reduced to a written document.  This will reduce either party from misinterpreting verbal communications.

 

The insurance industry, in the US alone, holds close to 10 trillion dollars in assets and collects around 650 billion in premiums.  These numbers communicate a few simple facts; uber sophisticated industry, significant leverage over individual insurers and well connected at your State Capital and in Washington.   This is not a diatribe of the insurance industry it’s just the INSIDE TRACK on the playing field and the insured does not have home court advantage.