Insurance contracts are complicated documents, especially forthe average consumer. Consequently, most states require insurers todraft policy language to comply with “readability” standards tomake it easier for consumers to understand complex coverage terms.Recently, regulators have focused on the extent to which policyforms are physically accessible to consumers.

The National Association of Insurance Commissioners formed aTransparency and Readability of Consumer Information Working Groupin 2012 to address this issue. “Transparency,” in this context,refers to the ability of consumers to obtain and peruse differentcarriers' HO policy forms before purchasing coverage.

Traditionally, consumers purchase coverage from an insurer basedon a broad summary of the insurer's contract terms, usually thedeclarations page. But if a prospect wants to delve into acompany's coverage terms, he would have to wait until receiving thecompany's entire base policy form in the mail—usually only afterthe customer purchases the policy. In other words, you have to buythe policy before you can know which losses are covered.