An article posted by Property Casualty 360 states a simple truth — Insurance contracts are complicated documents, especially for the average consumer.
If you have ever gone through a disaster like a hurricane, flood, tornado, fire, power outage, or cyber attack you are probably familiar with the expression “Buyer Beware”. In fact after Hurricane Sandy, the Department of Insurance Commissioner stated that a commercial insurance buyer is sophisticated enough to understand the provisions of an insurance contract and regulatory protections are meant for the individual buyer. So, what was the Commissioner really saying? Businesses have the resources available whether they use them or not to become an educated buyer.
Regulators in a variety of states are looking to make it easier for individual consumers to obtain copies of policy language in advance of the actual purchase. It is not uncommon for a buyer to wait more than two months before seeing the policy they have purchased. In the insurance industry, most buyers (99%) get a brief description of what they are buying without understanding the full details. It is not until a loss occurs that they realize what they paid for was not right…buyer beware.
Here is a little tip … all insurance carriers can provide a sample policy in advance of a purchase. You just have to ask and then determine who is best to review. Is this an internal function, legal counsel, broker, independent advisor … what are the differences and where will you get the most thorough assessment of your coverage?
The phrase “Caveat Emptor” comes from the fact that buyers often have less information about the product or service they are purchasing, while the seller has more information … this is so befitting of the insurance industry when it comes to the buyer/seller relationship.
Take heed and remember “Caveat Emptor” each and every year when you purchase or renew insurance.