Column: Roger's Soapbox

Why Is Insurance Policy Language So Confusing?

By: | May 1, 2018

Roger Crombie is a United Kingdom-based columnist for Risk & Insurance®. He can be reached at [email protected]

Have you ever read the terms and conditions (T&C) of any of your own active insurance policies? Of course you haven’t — and you work in the industry and thus might be expected to understand at least some of the verbose and obfuscatory language.


Obfuscatory means ‘intended to conceal the truth by confusion.’ Isn’t that the very definition of what we expect T&C to achieve?

Words change their meanings over time and depending on context; thus, the meaning of a single word can affect a claim faster than an athlete on steroids. Once, people were bored by T&C; now they are bored of them. Most people are married to each other — invitations recently sent out by Prince Harry invite guests to his wedding with Meghan Markle.  With in this case is a Royal usage. For the common people, historically, the only thing you were married with was a hangover.

Why or when these changes crept into the language, we will never know. One might argue that only a pedant would care. What the changing meaning of a single word can bring to your insurance claim, however, is potentially far more important.

The Wall Street Journal has reported that consumers lose $250 billion a year by not reading the relevant T&C.

I know that you haven’t read the T&C on your insurance policies, in part, because neither have I. When considering internet banking, I did read in advance the T&C my bank imposes on its online users. I was able to translate the key phrase into comprehensible English: Any amount taken from my account using my password would be non-refundable, regardless of who took it. I don’t bank online.

In Cullen Hoback’s 2013 documentary film, “Terms And Conditions May Apply,” he pointed out that the average web user would need to spend at least one working month per year reading the T&C on the websites he or she uses. The Wall Street Journal has reported that consumers lose $250 billion a year by not reading the relevant T&C.

Now comes proof — the hard evidence that no one reads the T&C.

Mikko Hypponen, a security researcher with F-Secure, has reported that 100 percent of those offered free wifi by the company failed to read the T&C. They might wish they had. In the middle of a not overly long agreement, users were told that using the service would mean losing their first-born child to the company, failing which they would have to hand over their favorite pet.


Hypponen pointed out the widespread use of the term TLDR in relation to T&C: It stands for ‘Too Long, Didn’t Read.’ Which is, of course, exactly what Facebook’s obfuscatory T&C creators had in mind. As did, perhaps, your insurers.

The research was reported during the ‘scandal’ that Facebook sold customer details to anyone who wanted them. Every single user whose details were passed on had electronically signed an agreement to allow just that, making the sale of data entirely legal. What exactly did the Facebookers think they were going to enjoy? A free service? Data protection? Privacy?

Facebook might be extinct by the time you read this, an after-the-fact market-based solution. The simple rule is: If you want the product enough, don’t bother reading the T&C. Agreeing to them is always a prerequisite for using the service. No T&C, no laundry. &

More from Risk & Insurance

More from Risk & Insurance

Risk Matrix: Presented by Liberty Mutual Insurance

10 Ways Professional Lines Are Facing Post Pandemic Risks

From securities litigation down to adoption of ESG efforts, how professional lines embrace the post-pandemic world will require an added review of potential risk.
By: | September 1, 2021

The R&I Editorial Team can be reached at [email protected]