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13% of policyholders do not understand insurance policies

by constructaquote - 21 June 2018


If you’re one of those people who do not understand the insurance jargon after taking out a policy – you’re not alone as most people don’t understand. Research carried out by The University of Nottingham and insurance firm Browne Jacobson has shown that 13% of policyholders do not understand their insurance policies –suggesting that they are too complex. In addition, they also reveal that in order to meaningfully understand a policy you must be educated to at least A-level standard.

The issue with many insurance policies is the use of extensive uncommon phrases and words used, as well as complex sentences and paragraphs.

However, the research did find that most policy wording can be rectified. One of the ways this was achieved was through the use of eye-tracking software. Through the eye-tracking software, it was found that readers often took longer to read certain words and sentences. The top 10 slowest read words were recorded. For example, the words, ‘insurer’, ‘insured’ and ‘insurance’ were on the list. It is likely that these were some of the slowest read as it took to long for the readers to understand the definition of the word and apply it to the section they were reading.

Another method used drafting methodologies in order to reduce the reading age for many complex documents from postgraduate level to comprehensive school level. From the original 13% of policyholders, 89% of them were now able to read it.

Kay Snowley, Business Development Manager from The University of Nottingham, says: “Drafting a perfectly worded policy document is virtually impossible, but what our research proves is that there clearly is a lot that can be done to improve how they are currently written. Each finding shows that with a little alteration, over time, the overall readability and understanding of these documents can be improved.”

At constructaquote.com we try to use plain English when we write and our UK based contact centre are always on hand to explain policies to you before you buy. To find out what policies we offer visit our insurance page. We also have a handy guide to help you understand some of the insurance jargon.