According to Professor Boardman, customers do not read their insurance policies, and insurance companies do not draft policies to be read by customers (Boardman, 2010). Insurance companies prepare policies to be read by attorneys and the courts.
Therein lies the problem.
One recent Insurance Policy was over 300 pages (we will refer to this as the “Sample Policy”). Full of Endorsements, Exceptions and Exclusions, what was insured by one part of the Policy was excluded by another part.
Customers do not understand what they are buying. The boilerplate of insurance policies is hopelessly confusing and incomprehensible. Studies suggest that comprehension is significantly reduced when a sentence reaches 43 words (Hyman, 2025). The first sentence of the first section of the Sample Policy was 145 words long.
The Illinois Supreme Court has said: “It is well established that an insurance contract is one of adhesion” (Cramer v. Insurance Exchange Agency, 1996, at p. 533). This means, take it or leave it. The customer cannot negotiate the Policy of Insurance.
In a different case, the Illinois Supreme Court stated: “Customers generally know their own goals better than their insurance agent does, but determining if a policy achieves those goals will be difficult when customers do not read the policy. . . .Although customers should read their policy and discover any defects, we recognize that there will be a narrow set of cases in which the policyholder reasonably should not be expected to learn the extent of coverage simply by reading the policy” (American Family Mutual Insurance Co. v Krop, 2018, at ¶¶29, 36).
These contradictory statements reflect the fundamental problem with insurance.
Professor Boardman found that insurance companies are encouraged to retain murky provisions (Boardman, 2006). Courts follow other courts because even the courts have difficulty understanding what the insurance policies mean. The South Carolina Supreme Court stated about insurance policies that:
“Ambiguity and incomprehensibility seem to be the favorite tools of the insurance trade in drafting policies. Most are a virtually impenetrable thicket of incomprehensible verbosity.” (S.C. Inc. Co. v Fid & Guar. Ins., 1997, at p. 206).
Insurance policies are not negotiated. Policies are prepared in legalese, favor the insurance company, and are usually given to the customer after the policy has begun. It is no wonder that customers are often disappointed, disillusioned and feel betrayed when claims are denied. Customers are unable to understand a policy until it is too late – when the loss has occurred – and the time for the insurance company to pay has arrived.
We have successfully litigated dozens of commercial insurance cases and recovered millions of dollars for clients. Experienced counsel provides an advantage to level the playing field in coverage disputes.
References
American Family Mutual Insurance Co. v Krop, 2018 IL 122556 (2018).
Boardman, M. (2006). Contra proferentem: The allure of ambiguous boilerplate. Michigan Law Review, 104, 1105-1128.
Boardman, M. (2010). Insuring understanding: The tested language defense. Iowa Law Review, 95, 1075-1124.
Cramer v. Insurance Exchange Agency, 174 Ill.2d 513 (1996).
Hyman, M. (2025). Communicating in the language of the people. Illinois Bar Journal, 113(2), 38-39.
S.C. Ins. Co. v. Fid. & Guar. Ins., 489 S.E.2d 200 (S.C. 1997).
