Insurance coverage is a legal agreement in between the insurance provider, who promises to pay for a covered loss, and the insured, who promises to pay premiums.
Pull out among your insurance plan and check out the meaning of “covered loss.” Copy the definition into a Word file.
Now look at the capitalized, italicized or bolded words within the sentences. Those words are defined terms. The meanings will be discovered within the policy itself or a referenced statute.
Now replace every defined term in your covered loss paragraph with the real definition. This will likely triple the length of the paragraph.
Now take a look at any exceptions mentioned in your policy. Go back and place each exception in the pertinent area within your covered loss meaning. You might have to insert an exception more than as soon as if it uses to more than one provision.
One last exercise: Read every insurance coverage case opinion and statute, federal and state, that has been released in the last 100 years, determine which are still good law and include them into your customized covered loss policy. Finally you have an extensive covered loss arrangement.
Impossible, you say? Of course it is. No surprise one of the top grievances about insurance is that it is simply too complicated. Other typical complaints: The policy is too costly, insurance companies postpone or reject claims for specious factors, insurer lowball settlement offers, it is too easy for an insurance provider to video game the system, insurance is a cash drain for most people and services, and the insurance policy will not cover a disastrous event like a cyclone or pandemic.
We might have a solution. It is called “insurtech.”
Insurtech is insurance coverage provided as a digital item. It makes sense because insurance coverage does not require a substantial operating plant or supply chain, it can be sold via a website or mobile app without a sales representative and the marketplace is substantial so even a small piece can translate into huge dollars.
New insurtech companies are being formed at a quick speed. They feature customer protections since a business should be licensed in every state in which it sells an item. Each product should fulfill the requirements of that state.
They also feature a much better client experience. Insurtech business use a structured digital procedure from start to complete: customer website, application, approval, signing, superior payment, claims, settlement offer and claim payment. The business are able to rapidly implement modifications to existing products, broaden line of product and market brand-new items. There are no hold-ups occasioned by agents on vacation, ill or on leave. Item and claim concerns are responded to by means of app, email or customer website practically instantly.
For examples of what some insurtech companies appear like, see Clearcover (car), Lemonade (house), Ladder (life), Oscar (health wellness reward) and Next Insurance coverage (service, expert liability, workers’ compensation).
The surge in insurtech products must require modifications to the stodgy insurance market, mandate removal of barriers to entry by new business, and lead to a change in guidelines. Difficult? That is what the taxi companies said when Lyft and Uber drove onto the scene.
Friendly and easy to understand insurance policies? Now that is development.
Virginia Hammerle is a Texas lawyer whose practice consists of estate preparation, guardianship and probate. Register for her newsletter at firstname.lastname@example.org!.?.!. Contact Hammerle Finley Law Firm to set up a consultation at hammerle.com. This column does not constitute legal recommendations.