If there’s one thing a business is used to, particularly an insurance business, it’s complaints. And as an insurer, probably a surprising number of complaints will stem from not just what your policies say, but how they say it. This is why clear and plain language is of absolute importance in the insurance sector. It reduces confusion and helps your insurance business to meet regulatory expectations.
I’ve recently been involved in a hefty insurance project. It’s involved proofreading all the policy documents, schedules, IPIDs and other things. Yep, it’s been a little dry. BUT I feel like it has taught me a lot about what policy wording can and can’t say, as well as how your language has to be very specific to avoid ambiguities.
For instance, do you clarify the difference between fire damage and heat damage? Only a minor thing, but you want to ensure that you’re happy to cover (or not cover) both.
Carry on reading to find out how you can potentially reduce the amount of complaints from your customers when your policy wording is clear.
Why do your policy documents need to be absolutely clear?
Policies are your promise to customers, laid out in your policy wording. This essential document tells them what you’re happy to cover, how much they’ll be paying, what their coverage is, what their excess is, as well as the claims and complaints procedure. It’s a lot of information, and it needs to be broken down into an easy-to-follow structure.
So when the language is complicated, full of jargon or buried deep in legalese, customers just can’t understand what they’re agreeing to or what is actually covered. And when they don’t understand it, they’re more likely to question it, which often shows up as complaints.
Say your terms and conditions are buried in lengthy paragraphs filled with technical terms. Your customer might:
- Miss key information about their rights
- Misinterpret what’s covered or what’s expected of them
- Assume certain restrictions that don’t actually exist.
This confusion can prompt customers to pick up the phone, lodge a complaint or even escalate their complaint to the Financial Ombudsman.
Essentially: the more complex you make your policy wording, the more complaints and customer service calls you’ll receive.
How does the FCA view clarity around policy wording?
Under the FCA’s Consumer Duty, firms are expected to communicate clearly so customers can make informed decisions. That includes writing information that’s clear, fair, not misleading and, crucially, understandable.
The insurance firms that get this right often report fewer complaints that are specifically linked to misunderstanding. This means you should put your focus on simplifying any vocabulary, defining and explaining terms that might be unfamiliar to the reader and avoiding any unnecessary complexity.
How to be clearer in your policy wording documents
So what does clarity actually look like for a policy wording document?
Speak person to person, not lawyer to lawyer
Most people don’t speak lawyer, unless they are one. The policy wording should therefore be aimed at a regular person, without too many legal terms or technical language. Where these things are required, a Definitions page should provide further detail and clarity.
Be consistent
When proofreading a 60-page policy wording document, I found many, MANY inconsistencies. Terms that were alternated, spellings that differed and even changes to what the policy did and didn’t cover.
If you mention a cancellation fee on one page, don’t then call it a service charge on another. It’s unnecessarily confusing for the reader.
Stick to a structure
Good structure matters just as much as good wording. Break long sections into clearly titled segments, sequence information in a way that reflects the customer’s journey, and highlight what matters most upfront. This helps customers find what they need fast and reduces frustration.
Where possible, refer to other pages in the document to help the reader find the section they need. They don’t want to read the whole document, but instead want to find one specific section to check their cover or cancel their policy. For this reason, always include a Contents table.
Put your most important information first
When is the average consumer most likely to read their policy wording? When they want to make a claim. Until then, it sits in the back of the filing cabinet (or at the bottom of their emails).
So when they do finally dig it out, they probably want to know how to make a claim. This information should be clearly labelled within the document so they can flick straight to that section. It should clearly state how they can make a claim online or via post.
Other information you might want to put first includes the Customer Services contact information, as well as the annual/monthly premium they’ll be paying for their insurance.
The whole point of this exercise is to reduce uncertainty. Customers who understand what they’re signing up for feel more confident and are far less likely to feel misled or disappointed later, so make your policy as clear as day.
If you need a copywriter who has experience checking over IPIDs, insurance schedules and policy wording, then get in touch! I can proofread, rewrite and more.
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