Know more about your favorite TV show than your insurance policy?

More than half (57%) of the respondents to a Nationwide Insurance survey said they know more about their favorite prime-time television show than they do about their insurance policy.

 

When asked to describe their insurance policy, consumers said it was too long (53%), complicated (43%), overwhelming (31%) and confusing (29%).

 

The survey also found:

• Only 40% have read their entire policy (in the past 12 months)
• 2 in 5 say they completely understand policy details
• Half say they don’t understand how to file a claim after an incident

Most insurance policyholders want a simple explanation of their policy with the details summarized on a single page.

 

Nationwide Insurance believes changes in insurance laws would make it easier for policies to be more simple and understandable. Such changes include:

• Having an easy-to-read summary of coverage at the top of the insurance contract.
• Allowing insurers to use simpler language in the written communications with customers.
• Using electronic notifications and signatures on documents so consumers can more easily do business with insurance companies.

Nationwide has already made changes to its products and services to simplify the insurance experience for its members, including:

• Making members’ insurance information available to download on mobile devices through the Nationwide mobile app.
• Leveraging its exclusive agents to conduct On Your Side® Reviews with members so they can choose the coverage that meets their needs.
• Providing members with customer worksheets to use when working with agents to determine the type of coverage they want to buy.

Learn more about solving the insurance mystery in our infographic or contact a Nationwide Insurance agent to have an On Your Side® Review.

 

*Methodology

The Simplification Study was conducted between February 22 and March 5, 2013. The respondents were comprised of 1,594 adults ages 18+ who currently own property and casualty insurance. Results are weighted as needed for age, sex, race/ethnicity, education, region and household income. Propensity score weighting was also used to adjust for respondents’ propensity to be online. Individuals for this research were selected from among those who have agreed to participate in Harris Interactive surveys. Because the sample is based on those who were invited to participate in the Harris Interactive online research panel, no estimates of theoretical sampling error can be calculated.

UNDERSTANDING YOUR INSURANCE POLICY

Let's face it, reading your insurance policy is not like curling up with a good book. It's a fairly complex document that tries to explain all the things you're covered for, and all the things that are excluded when a loss occurs.

 

Luckily, many companies now provide insurance policy information that is easier to understand, but you still need to review the document carefully. Here are some general guidelines that can help explain how to read an insurance policy.

 

The common parts of an insurance policy include:

• Policy declarations – The declarations page is basically the first page of the policy package. The page states who is insured and the time period the policy provides coverage. It also gives the primary general information, such as a description of what’s insured, the coverages and primary coverage limits.
 
• Definitions – This section gives you the definitions of words and phrases you’ll see in the policy. For example: “Motor vehicle” and “Deductible” are two terms often found in an auto policy. Words with definitions may appear in bold print throughout the policy. That helps you know what to look up if you don’t know them already.

• Policy coverages – This section describes the specific insurance provided by listing what property is covered and for what perils. For example, a boat owner's policy may cover direct physical loss or damage to the boat and motor, portable equipment and other specified property. It can also provide liability coverage.

• Policy exclusions describe what coverage limits exist or how coverage may be eliminated depending on how a loss occurs. Insurers may allow policyholders to buy back coverage for some exclusions for additional premium. For example, earthquake coverage may be excluded for people who live in an area where earthquakes are unlikely to happen. However, if a customer would feel more comfortable with the coverage, they could buy it back.

• Limits and special limits – This section explains how much the insurer pays for particular losses or types of property. So, while something is covered, it may be covered for a specific dollar amount or for a limited percentage of the entire loss.
• Conditions – This section tells you what the insurer’s responsibilities are, and what your responsibilities are as the customer. This includes how to cancel a policy, subrogation and payments plans.

• Duties after a loss – This area gives guidance on what to do when a loss occurs. It includes notifying your insurer as soon as practical, notifying the police, if appropriate, and protecting your property from further damage.

• Endorsements – This area defines optional coverages available for additional premium. Endorsements change your policy to help better fit the policy to meet your needs. Amendatory endorsements may also be added by the insurance company to clarify policy terms and language.
 

Insurance terms, definitions and explanations are intended for informational purposes only and do not in any way replace or modify the definitions and information contained in individual insurance contracts, policies or declaration pages, which control coverage determinations. Such terms may vary by state, and exclusions may apply.