Insurance policies can come loaded with the thickest of legalese, which has on occasion confused and misled policy holders. It should be the prerogative of the insurance company to provide policies with clear and concise language so the consumer knows what they’re paying into. A recent report from United Policyholders reveals that this situation between policy holders and insurance companies has been degrading year by year.

A recent blog post from Nicole Vinson on the Property Insurance Coverage Law Blog points to a report released by Jay Feinman in April of 2017 from United Policyholders. The report details cover a number of subjects, more importantly the subject of “how well states themselves provide information to consumers and how their laws mandate insurance companies to disclose and provide to the public consumer.”

The report judges each state with a five star ranking system and surprisingly (let’s be honest, not surprisingly), the highest ranks come in at 3 stars for Florida and California respectively.

California is understandable given how many pro-consumer laws they have in place, but it seems they have a ways to go to reach that five star rank.

So what is the primary problem policy holders tend to have with their insurance policies?

According to Vinson, it all boils down to confusion and inconsistencies in the policy language. She says:

Many policyholders are impressed with the term “replacement cost” before the loss but it is later revealed that after reading and re-reading all the exclusions and limitations there are more issues to deal with before replacement even comes into play.

Even more apt is how the report puts it:

Insurance is the only product for which consumers don’t know what they are buying before they buy it.

I don’t know about you, but that’s a quote that could go into a textbook for future generations.

What do you think? Are the standards by which they rank these states too harsh or is it necessary?