This Is A Bad Idea And It Won’t Work

Check out this statement by U.S. Sens. Mark Dayton and Trent Lott about introducing federal legislation to require a "plain English" statement of coverage in insurance policies.  (The original link to this story was bad.  The original story disappeared, so I replaced it with a link to Sen. Dayton’s press release).  I hardly need to say anything to this audience about why policy language is written the way it is — every clause is in response to case law or statute.  Actually, the idea is not to rewrite policies, but apparently to require a separate statement of what is not covered. 

Some observations. First, insurance policy language is not a federal concern.  Second, is this "plain English" statement part of the policy that supplements or possibly contradicts the language of the policy? If not, what good is it?  Third, most people probably still wouldn’t read either the plain English statement or the policy.  Fourth, his idea is all wrong.  A policy tells you what is covered, then removes some things from coverage by exclusions.  Each type of insurance policy covers only a narrow, specific range of risk.  What is the sense in starting out with what is not covered as opposed to the relatively few things that are?  Very lame showboating is all this is.

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