Small print. Who reads it?

Do you read all of the Terms and Conditions of every insurance policy that you buy? Should you have to? The answer to both questions, given that I’m told the average policy document comes with something like 25,000 words, should be no. And for the vast majority of us it is actually no, certainly as far as the first question is concerned.

What you should be able to do is understand the major details of the policy. You should be told how much you are paying and you should be told the cover you are getting for that premium. You should also be told what is not covered by the policy, what the exclusions are to use insurance company speak.

And there should be a reasonable expectation that these things should all be described to us in straightforward language that we can understand without having to resort to the use of a dictionary.
At the moment that’s certainly not the case. Many insurance policy documents come with complicated explanations that would confuse even the most technically minded consumer, and some companies still resort to the use of phrases in Latin, especially when it comes to describing some medical conditions that may or may not be covered in critical illness policies.

And it’s not just insurance companies that seem to want to confuse us. I’ve answered a question this week from a reader confused by the way Utility companies advertise their pricing structures. That’s still causing us lots of problems. And another from a reader confused by the options she has with her ISA.

Then there’s all of the jargon that loan and credit companies come out with. How many of you know the difference between ‘annual percentage rate’ and ‘equivalent annual rate’? And more importantly, what difference does it make to the amount of money you pay back to the company you borrow from. What will you actually pay in interest every year for every £100 that you borrow? That’s what we need to know before we make a decision on which loan or mortgage or credit card is best for us.

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