The Value of Understandable Consumer Insurance Contracts

Logue Kyle (), Schwarcz Daniel () and Cude Brenda J. ()
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Logue Kyle: Douglas A. Kahn Collegiate Professor of Law, University of Michigan Law School
Schwarcz Daniel: Fredrikson & Byron Professor of Law, University of Minnesota Law School
Cude Brenda J.: Professor Emeritus, Department of Financial Planning, Housing and Consumer Economics, University of Georgia

International Review of Financial Consumers, 2023, vol. 8, issue 1, 1-15

Abstract: Insurance consumers, the intermediaries who serve them, and the regulators who protect them all would benefit from understandable consumer insurance contracts. This article outlines the benefits of understandable insurance contracts, identifies the regulatory tools that are or can be used to ensure such comprehensibility, and reviews the existing literature about how well consumers comprehend their insurance policies within the context of personal lines insurance in the U.S. The article concludes by proposing an empirical research strategy to study consumers’ understanding of the terms of homeowners insurance policies and, even when they have not read their policies, their expectations about coverage.

Keywords: Insurance policy language; consumer understanding; personal lines insurance (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:irfinc:v:8:y:2023:i:1:p:1-15:n:1001

DOI: 10.36544/irfc.2023.8-1.1

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