by Robin Landry

Created on: November 24, 2008   Last Updated: April 25, 2011

When I was a trainee underwriter back in 1985, a mid-level manager, "Mr. H." once told me, "Insurance coverage is kind of like luncheon meat. Almost everyone has purchased it at one time or another. But they really don't want to know how it's made!"

Today, as an insurance analyst working on ensuring that our company follows legal requirements when it comes to notifying customers of policy changes and their various rights, I suspect there is more than a grain of truth in the words of old "Mr. H". Despite all of our best efforts to achieve policy language that is clear and readable, I suspect that most customers still do not read their policies. It's almost as if they can smell the potential for confusing "legalese" through the envelope that their policy booklet arrives in and immediately shy away.

I believe that advertising is partially to blame. Insurance companies assure us that "we're in good hands" and that they are "on our side" and "just like good neighbors." With all these friendly, compassionate people looking out for us why would be bother to actually sit down and read our policies?

Unfortunately, however most customer dissatisfaction expressed through formal Department of Insurance complaints and lawsuits likely stem from the fact that the policyholder may not have understood what he or she was buying when the original purchase of homeowners insurance was made.

While reading a homeowners policy booklet cover to cover is probably as riveting as watching paint dry, having at least a basic grasp of coverage limits can protect you from paying too much because you are carrying coverages that you don't need (bad) or discovering, after a catastrophic loss that you are woefully underinsured (way worse).

In actuality, reading a homeowners policy isn't so tough provided that you have just a bit of background information. Think of it like reading a roadmap. It's much easier if you also have the map "legend", that little diagram that explains which roads are interstates and which might be unpaved service roads.

First, you will need a copy of your "Declarations Page". So, you may be thinking, "Umm, right; what's a Declarations Page?" That's a fair question. It is usually a piece of paper that your insurance company sent with your policy booklet and a lot of other paper inserts when you first bought the insurance. "Oh, that! Well; um; I kinda think that I might have just maybe thrown that away." If that's the case, no need to panic, just call your local insurance

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