The legalese and other language contained within an insurance policy can be extremely confusing for a policy holder. There are, however, more simple exclusions that customers need to be aware of when dealing with the fine print of their policy.

Imagine a scenario where you’re in court, going up against an insurance company who refuses to allow a claim through on your property. The situation goes that your property was robbed, but because of how you were robbed, the court rules in favor of the insurance company, thereby denying you any claim money.

Now this may be an extremely oversimplified case, but it’s something that has actually happened before.

Stephanie Poli over at the Property Insurance Coverage Law blog details a case (and much more!) similar to the aforementioned situation, saying:

… where the burglars entered the premises of the insured’s property on the second floor through a hold caused by a fire in the insured’s floor. The thieves placed planks from the first floor (the planks didn’t belong to the insured) up to the second floor and stole goods…

Now according to Poli, the case ended with the court ruling in favor of insurance company who had provided a policy with burglary protection.

Here’s where the fun small print issue comes into play.

You see, the fine print of the policy said that for any kind of burglary to be covered, there must be some sort of “forcible entry.” Because these thieves didn’t “force” their way into the property, the court ruled that the coverage didn’t apply in that case.

Another example of fine print, and in my opinion bizarrely worded fine print, is the case of some missing inventory. According to Poli, this is how things went:

…the insured’s property insurance policy covered warehouse inventory but excluded “property missing but there is no physical evidence to show what happened to it, such as shortage disclosed on taking inventory.” There the insured discovered an inventory loss after (a) a burglary alarm was tripped with no sign of unlawful entry and (b) a few days later, there were signs of unlawful entry into an office adjoining the warehouse. Because the events didn’t show what happened to the missing inventory, the “mysterious disappearance” exclusion applied.

So while getting someone to translate the legalese in your policy is paramount, understanding the fine print should still be the client’s obligation lest their claim end up a “mysterious disappearance.”

What do you think? Should the verbiage in policies be more broad or are these specific exclusions friendly to the consumer?