Implement regulations to control how insurance companies set premiums and handle claims. Currently, insurers collect premiums consistently, yet premiums often increase significantly after a policyholder files a claim. Additionally, policies are often written in complex language that can be difficult for the average consumer to understand, with lengthy terms and conditions that many don’t fully read or comprehend. This lack of transparency can result in companies avoiding payment on claims, despite policies being advertised as “full coverage.” To address these issues, consider the following regulatory measures:
Limit Premium Increases After Claims: Impose restrictions on how much companies can raise premiums following a claim, especially for minor incidents or first-time claims.
Ensure Transparency in Policy Language: Require insurance policies to use clear and understandable language, making terms, conditions, and coverage limits accessible to all consumers.
Prevent Coverage Evasion: Strengthen oversight to ensure that insurers cannot avoid payouts by using vague or complex policy terms, especially in cases where the policy is marketed as “full coverage” for auto, home, or medical insurance.
Improve Consumer Protection: Implement protections that hold insurers accountable, ensuring fair practices and safeguarding consumers against unreasonable premium hikes or claim denials.
These measures would help create a more balanced, fair, and transparent insurance industry that better serves the needs of policyholders.