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Every person that acquires a policy of insurance, whether designed to protect a dwelling, a commercial property, agriculture, crops from destruction by the actions of nature, or from liability arising from claims of torts, or cyber-attacks, must read and understand the policy before it is acquired to determine it provides the coverage requested. It must be read again before making a claim to an insurer.

A majority of the courts that have been called upon to interpret an insurance policy require that the person seeking insurance must read the insurance contract or – at the very least – have, a lawyer or insurance professional read, understand and explain the policy to the person acquiring the insurance.

For the last 55 years I have asked people making claims on an insurance policy whether they have read and understood their insurance policy. Most just laughed and claimed they never tried. Two, in my career, answered “yes.” After further questioning it became obvious that both lied since they knew nothing about the terms or conditions of the policy, they claimed they had read and understood. These facts horrify me as an insurance coverage lawyer, a consultant and an expert witness testifying in courts across the United States about the purchase and sale of insurance contracts and insurance claims handling.

My career, starting as a trainee adjuster in 1967 and later as an insurance coverage lawyer required that I read, understand and apply insurance policies issued by my clients to individuals and businesses. I have written, edited or revised, policies of insurance on behalf of insurer clients. I even read insurance policies I acquire to protect my property and protect me against tort liability before I order the policy. I know I am unusual, but I should not be. My practice should be the norm.

What is Insurance?

Many states have different definitions of the word “insurance” but each have the same essential elements:

It must be a written contract.

One party (the insurer) agrees with the other (the insured) as to the insurance provided.

The insurer, for consideration (payment of a premium) agrees to indemnify the insured against a contingent or unknown event.

The promise to indemnify is limited to certain identified risks of loss arising from a fortuitous, contingent or unknown event.

Insurance is a contract like all other contracts. No one should enter into a contract ignorant of its terms and conditions. Many people would never sign a lease without reading it. No businessperson will sign a lease until he or she has been advised by a lawyer representing the businessperson alone, of its terms, conditions, limitations, and whether it is favorable to the person seeking to lease commercial property. No one should agree to the terms of a mortgage without reading the contract. Insurance contracts, however, are almost never read by the person insured. Some are not read by the agent, broker or underwriter who sell the insurance, or the lawyers retained to enforce it. Yet hundreds of hours of the work of insurance professionals are involved in the writing of policies of insurance.

There is no viable excuse for not reading an insurance policy. Modern insurance policies, as a result of state statutes, are required to be written in plain language or easy to read language sufficient for anyone with a fourth‑grade education to understand. I describe the modern language of insurance policies as “Sesame Street English.”

Why, then, do people fail to read their insurance policy?

Insurance policies have a bad reputation. People believe insurance policies are impossible to understand. Courts in the past have encouraged this belief. Policies are believed by the common person to be confusing and complicated. Sections of the contract are frequently cross‑referenced to other sections of the policy, often in a convoluted way.

Insurance companies strive to make their policies as clear as possible because when coverage is subject to a legal challenge, ambiguity in the language will always be interpreted in a way that favors the insured, not the insurer.

For example, in Insurance Company of North America v. Electronic Purification Company, 67 Cal. 2d 679, 689, 63 Cal. Rptr. 382, 433 (1967) the California Supreme Court noted:

[T]he insurance company gave the insured coverage in relatively simple language easily understood by the common man in the marketplace but attempted to take away a portion of this same coverage in paragraphs and language which even a lawyer, be he from Philadelphia or Bungy, would find difficult to comprehend.

Courts, called upon to interpret or enforce a contract of insurance, will always conclude that if an insurance contract is neither ambiguous nor difficult to comprehend, it will be enforced as written. [Sharbono v. Universal Underwriters Ins. Co., 139 Wash. App. 383, 394 (2007)]

If twenty‑first century judges want to make better sense of the insurance area of law, they should start by understanding and admitting that:

Almost nobody reads everything he or she signs;

Almost nobody is able to read everything he or she signs;

What drafters do want is to be able to treat those insured as if he or she had read everything.

Drafters of insurance policies do not care if, in fact, he or she has not – and, indeed, in many cases would prefer that he or she did not.

Do not call it a duty. That just adds insult to injury.

However, it is black letter law that one who knowingly and voluntarily assents to a contract whose terms are contained in a writing should be held legally responsible for his or her actions by being held to those terms, in the absence of fraud, mistake, or other excusing cause.

A party cannot negotiate, enter into and perform under a contract, only to later claim that it objected to some provision of the contract and thus retained a mental reservation to the terms of the agreement. Such a holding creates the risk that any disgruntled party may belatedly assert a lack of “voluntary” assent to a contract that it executed and performed. [DJ Mortg., LLC v. Synovus Bank, 750 S.E.2d 797, 325 Ga.App. 382 (Ga. App. 2013)]

Whether almost no one reads their insurance policies, and my experience seems to establish the fact, that fact does not make them less effective contracts. An adhesion contract only means the person offering the contract gives the person to whom it is offered only two choices:

accept the contract or

reject the contract.

If accepted the contract is enforceable.

Plain Language Policies

The need for – plain language – in an insurance policy was first described in the United States in the early 1950s. The Federal Government’s most recent plain‑language initiative began in 1998, when President Clinton issued a Memorandum on Plain Language in Government Writing to the heads of executive departments and agencies. He said:

We are determined to make the Government more responsive, accessible, and understandable in its communications with the public. By using plain language, we send a clear message about what the Government is doing, what it requires, and what services it offers. Plain language saves the Government and the private sector time, effort, and money. [President Clinton. Memorandum for the Heads of Executive Departments and Agencies on Plain Language in Government Writing. June 1, 1998.

There is no one generally accepted definition of plain language or plain English. But most people agree that a plain‑language document is one in which people can:

Find what they need,

Understand what they find, and

Act appropriately on that understanding.

Key elements of plain language are to:

Organize information so the most important behavioral or action points come first;

Break complex information into understandable chunks;

Use simple language or define technical terms; and

Provide ample white space so pages look easy to read.

In addition to the key elements, there are dozens of plain‑language guidelines and techniques such as using short sentences and active voice when possible. Document design principles highlight the importance of organization and format and enhance the impact of plain language.

Good document design required bringing together prose, graphics and typography for purposes of instruction, information, or persuasion. Plain language does not require the writer of an insurance policy to – dumb down – the policy or eliminate the required precision necessary to make a contract enforceable.

Sometimes, insurance professionals are concerned that using plain language will oversimplify information to the point where it is inaccurate or worthless. Plain language is not anti‑intellectual, unsophisticated, drab, or inadequate. Plain language has to do with clear and effective communication and should be considered nothing more nor less.

It is the style of Abraham Lincoln, Mark Twain, and Winston Churchill Plain language is not just about vocabulary or grade level. Writing to a certain grade level does not necessarily ensure that the message is in plain language or understood by the intended audience. All materials, all terms and all conditions, especially in an insurance policy, should be evaluated for understanding with the intended users, regardless of grade‑level score.

States followed the direction set by the federal government and required insurers to modify their insurance policies to be written in plain language. In doing so, the plain language insurance policies took away the argument that the policy was too hard to understand and, for that reason, should not be enforced to the detriment of the insurer.

So, why, with the new, easy to read, plain language policies, do people fail to read the insurance policy? There is no logical answer. Perhaps it is the imbedded prejudice that makes some people believe they could never understand a policy even if they tried to read it. More likely it is simply the fact that most people trust the insurance agent or broker who obtained the policy for them and trust – often, without cause – the agent or broker to get the coverages they needed.

From my 55‑years reading and interpreting insurance contracts I can only say that those people who did not read their policy get very upset when their insurance agent or broker tells them they acquired the best available policy and that it covers almost everything. However, in fact, it does not mean the policy covered every possible contingency.

When an adjuster or lawyer points out that there is no available coverage for their claim, they contend they were deceived. Had the insured read the policy before it was acquired, he or she would know that no insurance policy covers every possible risk of loss faced by a person or business. Some risks of loss are difficult, if not impossible, to insure. Consider the risk of loss by war, atomic attack, earthquake, flood, etc. can be insured but only for extremely high premium and deductibles or self‑insured retentions so expensive to make such coverages unsaleable.

Most insurance policies, as a result, exclude – in clear and unambiguous language – coverage for those extreme risks. The person insured who does not read the policy will be upset when his property is destroyed by a flood or earthquake. Had he read the policy and wanted coverage for earthquake or flood he or she would have been directed to a specialty insurer who is in business to issue a policy – probably expensive – that provides that coverage.

The duty to read a policy appears in multiple jurisdictions. For example: In Georgia, the insured has a duty to read and understand the policy. [Cotton States Mut. Ins. Co. v. Coleman, 530 S.E.2d 229, 231 (Ga. Ct. App. 2000)] An insured who can read is required to read the policy and is presumed to have understood its contents.

Any failure of an insured to acknowledge or notice these terms cannot circumvent a clear provision in the Certificate, as “[a]n insured has the duty to read the insurance policy or have it read to him or her.” [Jin Chai-Chen v. Metro. Life Ins. Co., 141 N.Y.S.3d 41, 43 (1st Dept. 2021); Am. S.S. Owners Mut. Prot. & Indem. Assn v. Carnival PLC (S.D. N.Y. 2022)]

In Mississippi, a plaintiff is deemed as a matter of law to have read and understood the terms and conditions of his insurance contract. [Mladineo v. Schmidt, 52 So.3d 1154, 1167 (Miss. 2010)]. Under the duty‑to‑read and imputed‑knowledge doctrines, an insured is deemed to have knowledge of his insurance policy. An insured may not neglect or purposefully omit acquainting himself with the terms and conditions of the insurance policy and then complain of his ignorance of them.

In Zaremba Equip, Inc v Harco Nat’l Ins Co, 280 Mich.App. 16; 761 N.W.2d 151 (2008) the Michigan Court of Appeal noted that an insured’s duty to read insurance policy documents does not preclude a negligence action against the insurance agent. In that case, the plaintiff alleged negligence against the insurance agent on the basis that the agent failed to obtain the requested coverage or accurately represent the coverage obtained in the renewal policy. The jury found in favor of the plaintiff, and on appeal the Court of Appeal held that the trial court erred by failing to instruct the jury on comparative negligence regarding the plaintiff’s failure to read the insurance policy and related documents. Because plaintiff’s negligence claims in the instant case were tort-based, the Court of Appeal concluded that the plain language of the relevant statutes i.e., the comparative fault statutes, required the trial court to give defendants’ requested instruction regarding comparative negligence. In addition, the Court of Appeal concluded that plaintiff’s admitted failure to read the policy could qualify as comparative negligence and that the trial court should have permitted the jury to consider whether plaintiff unreasonably failed to read the insurance policy and related documents. [Holman v. Farm Bureau Gen. Ins. Co. (Mich. App. 2022)]

In Texas, misrepresentation claims accrue when the policy is issued because the insured has a duty to read the policy and is responsible for understanding the policy’s terms and conditions. [Khoei v. Stonebridge Life Insurance Co., No. H‑13‑2181, 2014 WL 585399, at *7 (S.D. Tex. Feb. 14, 2014).] Under Texas law, an insurance agent has no duty to explain policy terms, and the insured has a duty to read his [or her] insurance policy and is bound by its terms even if they were not fully explained. [Avila v. State Farm Fire & Cas. Co., 147 F. Supp. 2d 570, 581 (W.D. Tex. 1999); Dike v. Penn Ins. & Annuity Co., 295 F.Supp.3d 530 (E.D. Pa., 2018)]

In Alabama, the insured was under a duty to read his insurance policy. [Alfa Life Ins. Corp. v. Reese, 185 So. 3d 1091, 1102‑04 (Ala. 2015)] Similarly, in West Virginia, a party to a contract has a duty to read the instrument. [Soliva v. Shand, Morahan & Co., Inc., 176 W. Va. 430, 345 S.E.2d 33 (1986)] Finding that an insured had a duty to read the coverage reduction provision, as directed by his insurer. [American States Ins. Co. v. Surbaugh, 231 W. Va. 288, 299, 745 S.E.2d 179, 190 (2013)] In so ruling, the West Virginia supreme court explained:

In simple terms, the Court’s decision is based on the premise that consumers do not read (and even if they do read, cannot understand) the terms that insurance companies use in insurance policies. Insurance companies give consumers the impression that they have full coverage under a comprehensive policy, and routinely fail to tell the consumer in plain English of the existence and the meaning of the legalistic exclusions that the insurance company has buried in a policy. So, when an insurance company seeks to avoid liability on an automobile insurance policy through the use of an exclusion, courts should first determine whether the insurance company created a reasonable expectation of coverage in the consumer, and whether the insurance company eliminated that expectation by telling the policyholder (1) that their coverage has been reduced or eliminated by the exclusion, and (2) that their premiums have been reduced to reflect the exclusion. [Mitchell v. Broadnax, 208 W.Va. 36, 537 S.E.2d 882 (W. Va., 2000)]

In California, the general rule is that one who assents to a contract is bound by its provisions and cannot complain of unfamiliarity with the language of the instrument. [Madden v. Kaiser Found. Hosps., 17 Cal. 3d 699, 710 (1976).] An insured has a duty to read his policy. [Fields v. Blue Shield of Cal., 163 Cal.App.3d 570, 578 (1985).] If the language of an insurance contract is in fact clear and unequivocal, a party will be bound by its plain meaning, because >an insured has a duty to read his insurance policy. [Hallowell v. State Farm Mut. Auto. Ins. Co., 443 A.2d 925] Also, generally, a contracting party should discover mistakes at the time the contract is executed. [John HancockMut. Life Ins. Co. v. Cohen, 254 F.2d 417, 423 (9th Cir. 1958) (noting “one who is presented with an insurance policy has the duty to read it,” and finding this applies equally to the company issuing the policy); Lennar Mare Island, 139 F.Supp.3d at 1165 (finding insurer should have discovered mistake at time of signing insurance contract); Fin. Indem. Co. v. Messick (E.D. Cal. 2022)]

In Indiana, an insured has a duty to read and become familiar with the contents of an insurance policy. [National Mut. Ins. Co. v. Curtis, 867 N.E.2d 631, 635 (Ind.Ct.App.2007). However, a different scenario arises if an insured relies upon the representation of the insurer or its agent that a particular loss is covered, as reasonable reliance upon an agent’s representations as to what will be covered under a policy can override the insured’s duty to read the policy.[Filip v. Block, 879 N.E.2d 1076, 1084 (Ind.2008) (citing Village Furniture, Inc. v. Associated Ins. Managers, Inc., 541 N.E.2d 306, 308 (Ind.Ct.App.1989)]

In New Mexico, it is a fundamental tenet of contract law Athat each party to a contract has a duty to read and familiarize himself with the contents of the contract, each party generally is presumed to know the terms of the agreement, and each is ordinarily bound thereby.” [Ballard v. Chavez, 1994‑NMSC‑007, & 8, 868 P.2d 646, 648.]

Under Washington law, the insured has an affirmative duty to read her policy and be on notice of the terms and conditions of that policy. [Dombrosky v. Farmers Ins. Co. of Washington, 54 Wash.App. 245, 257, 928 P.2d 1127 (1996); Int‘l Marine Underwriters v. ABCD Marine, LLC, 313 P.3d 395, 402 n.14 (Wash. 2013)]

In North Carolina, a person of mature years of sound mind who can read or write who signs or accepts a deed or formal contract affecting his pecuniary interest, it is his duty to read it, and knowledge of the contents will be imputed to him. Where an insured failed to use reasonable diligence by not reading the insurance policy he was not allowed to complain. [Holmes v. Sheppard, 805 S.E.2d 371, 376 (N.C. App. 2017)]

Generally, in North Carolina, State Farm Mut. Auto. Ins. Co. v. Gaylor, 190 N.C. App. 448, 452, 660 S.E.2d 104, 107 (2008), requires persons entering contracts of insurance, like other contracts, to have a duty to read them and ordinarily are charged with knowledge of their contents. Where a party has reasonable opportunity to read the instrument in question, and the language of the instrument is clear, unambiguous and easily understood, failure to read the instrument bars that party from asserting its belief that the policy contained provisions which it does not. The events, communications, and documents in the record should only have alerted plaintiffs of the need to investigate their potential insurance coverage and make certain of any applicable insurance policies as soon as possible. [JBL Commc’ns, Inc. v. Amco Ins. Co., 865 S.E.2d 373(Table) (N.C. App. 2021)]

Applying federal law, an Oregon District Court made clear that the insured had a duty to read the policy and acted unreasonably in relying on adjusters provided only as a A courtesy by an insurer fulfilling a National Flood Insurance policy. [Fed. Crop Ins. Corp. v. Merrill, 332 U.S. 380, 385 (1947)); Surfsand Resort, LLC v. Nationwide Mut. Fire Ins. Co. (D. Or., 2018)]

Given the special nature of the insurance relationship involved under the NFIP, courts have made it clear that an insured has a duty to read and understand the terms of its SFIP. [Richmond Printing LLC v. Dir. Fed. Emergency Mgmt. Agency, 72 F. App’x 92, 98 (5th Cir. 2003)]

In Illinois, the court has specifically recognized an insured’s duty to read an insurance policy. [Perelman v. Fisher, 298 Ill. App. 3d 1007 1011, 233 Ill. Dec. 88, 700 N.E.2d 189 (1998)] When an insured sues his or her insurer after failing to note a discrepancy between the policy issued and received and the policy requested or expected, the insured will be bound by the contract terms because he or she is under a duty to read the policy. [First Mercury Ins. Co. v. Ciolino, 2018 IL App (1st) 171532, 107 N.E.3d 240 (Ill. App., 2018)]

In Michigan, an insurance policy is, like any other contract, an agreement between two parties. [Tenneco Inc v. Amerisure Mut. Ins. Co., 281 Mich. App. 429, 444; 761 N.W.2d 846 (2008).] The goal in the interpretation of a contract is to honor the intent of the parties. [Klapp v. United Ins. Group Agency, Inc, 468 Mich 459, 473; 663 N.W.2d 447 (2003)]. The primary source of a policy of insurance is the language of the contract itself. [City of Grosse Pointe Park, 473 Mich. at 197‑198. Thus, insurance policies are enforced according to their terms, and a court may not hold an insurer liable for a risk it did not assume.] [Liparoto Const, Inc. v. Gen Shale Brick, Inc., 284 Mich. App. 25, 35; 772 N.W.2d 801 (2009).]

In ordinary circumstances, the insured has no duty to read a renewal policy sent to him or her and may assume that the renewed policy contains the same terms and conditions as the previous policy unless warned that the renewal policy has changed. [Government Employees Ins. Co. v. United States, 400 F.2d 172, 175 (10th Cir. 1968); Whiteside v. New Castle Mut. Ins. Co., 595 F.Supp. 1096 (D. Del., 1984)]

Reliance on Superior Expertise of Others

An insured Plaintiff had a right to rely on the superior expertise of his, her or its agent and had the right to assume that its agent performed its duty. Thus, contrary to the defendant’s contention, the plaintiff had no duty to read the policy if he, she or it relied on the superior expertise of the agent. [United Olympic Life Ins. Co. v. Gunther, 19 F.3d 1441, 1994 WL 96328 (9th Cir., 1994)]

In Pennsylvania, the Pennsylvania Supreme Court has stated that the idea that people do not read or are under no duty to read a written insurance policy is not novel [Rempel v. Nationwide Life Ins. Co., Inc., 471 Pa. 404, 370 A.2d 366, 368 (1977); Tran v. Metropolitan Life Ins. Co., 408 F.3d 130 (3rd Cir., 2005); (citing Dowling v. Merchs. Ins. Co., 168 Pa. 234, 31 A. 1087 (1895)]. The Rempel court elaborated on this principle and held that the policyholder had no duty to read the policy unless under the circumstances it is unreasonable not to read it and held that the question of whether policyholders’ reliance on the agent’s allegedly fraudulent representations was justifiable should be presented to the jury. [Tran v. Metropolitan Life Ins. Co., 408 F.3d 130 (3rd Cir., 2005)] It was also held that the policyholder has no duty to read the policy unless under the circumstances it is unreasonable not to read it. [Tonkovic v. State Farm Mut. Auto. Ins. Co., 513 Pa. 445, 521 A.2d 920 (Pa., 1987)]

In Kansas, the courts provide an insured an exception to the requirement that the insured read the policy. The Tenth Circuit found it clear that in Kansas the insured may assume that an insurance policy will conform to the application. The insured may rely on this assumption and is under no duty to read the policy to see whether it does in fact conform. [Stamps v. Consolidated Underwriters, 205 Kan. 187, 468 P.2d 84; German American Ins. Co. v. Darrin, 80 Kan. 578, 103 P. 87. The purpose of allowing such relief is to make the insurance policy reflect the expectations of the insureds when they executed the application. [Rider v. State Farm Mut. Auto. Ins. Co., 514 F.2d 780 (10th Cir., 1975)]

Only a Fiduciary is Obligated to Read or Explain the Terms of the Policy to the Insured

An agent or broker has no duty to read or explain the terms of the contract to the insured absent a special, fiduciary relationship. [Smith v. Union Nat’l. Life Ins. Co., 286 F.Supp.2d 782, 787 (S.D.Miss. 2003)]. Mississippi law imposes no fiduciary duties on an insurance agent to an insured. [Walden v. Am. Gen. Life, 244 F.Supp.2d 689, 696-97 (S.D.Miss. 2003); Hicks v. N. Am. Co. for Life & Health Ins., 47 So.3d 181, 191 (Miss. Ct. App. 2010; Wilson v. Kemper Corp. Servs. (S.D. Miss. 2022)]

When a court held that there may be no duty to read an insurance policy where misrepresentation and concealment are alleged under certain circumstances an insurer may be liable for misrepresentation or failure to deliver agreed‑upon coverage where the agent misleads the insured as to the extent of coverage, even though the insured did not read the policy and discover the actual extent of the coverage. [Lin v. John Hancock Variable Life Insurance Company, B189108 (Cal. App. 4/30/2007) (Cal. App., 2007)]

It has long been the law in Oklahoma that an insured’s failure to promptly examine a policy and discover departure from an insurance agent’s assurances does not defeat reformation of the policy. [Commercial Casualty Insurance Co. v. Varner, 160 Okl. 141, 16 P.2d 118 (1932), followed by Warner v. Continental Casualty Co., 534 P.2d 695 (Okla.App.1975).] Under Oklahoma law, an insured has no duty to read his written policy and notice discrepancies between it and previous representations of a soliciting agent. [Business Interiors, Inc. v. Aetna Cas. and Sur. Co., 751 F.2d 361 (10th Cir., 1984)]

The Insurance Contract is Usually Enforceable as Written

If the contract is accepted, it should be binding upon both parties as long as it is clear and unambiguous and none of the exceptions to the requirement that the policy must be read by the insured it will be enforced as written.

I don’t believe it is necessary to change the language used by a court interpreting an insurance contract. I only expect that the court will interpret the contract as binding as long as it is clear and unambiguous and was not obtained as a result of mistake, misrepresentation of material fact, concealment of material fact or fraud.

There is no question that most people, regardless of case law, do not read their insurance policy. Whether read or not all of those contracts are enforceable, and no one should argue that the terms should be ignored because they were not read.

Courts, interpreting insurance policies, seeking to deal fairly and in good faith with both parties to the insurance contract, must:

Recognize that all parties to the insurance contract are required to treat each other with the utmost good faith and do nothing to deprive the other of the benefits of the contract.

Read every word in the insurance policy from:

the cover sheet, to

the declarations page, to

the basic wording, to

all endorsements, and every other word up to

the signature by the insurer.

Identify all parties to the contract.

Determine whether the policy was acquired from an insurance agent representing the insurer or a broker representing the insured.

Determine if the insured actually read the policy before ordering it.

Determine if the insured read the policy after it was issued and delivered to the insured.

Determine if any specialist B lawyer, risk manager, insurance consultant, agent or broker B advised the insured about the contents of the policy.

Determine if any mistakes were made in the production of the policy wording.

Determine if either party:

Misrepresented a material fact.

Concealed a material fact.

Deceived the other.

Attempted fraud.

Defrauded the other.

Determine if the policy wording contains any ambiguity that would affect the rights and obligations of the parties.

Find the best way for each of the parties to the contract obtain the benefits of the contract.

Determine how each party has treated the other with the utmost good faith and fair dealing.

Make a ruling that is fair, reasonable, and allows the parties to the contract to keep the promises made.

Is Failure to Read a Policy a Defense to Negligence of the Agent or Insurer?

An insured has no right to rely on an agent’s patently absurd interpretation of a policy. An insured may rightfully rely on an agent’s plausible interpretation of a policy, so long as the interpretation does not conflict with the printed policy. [Flamme v. Wolf Ins. Agency, 239 Neb. 465, 476 N.W.2d 802 (1991); Bayer v. Lutheran Mut. Life Ins. Co., 184 Neb. 826, 172 N.W.2d 400 (1969).]

If an insured could have read and understood the policy, then the insured should be charged with knowledge of the policy’s contents. By analogy to misrepresentation rules and the rationale for those rules, the court will usually hold that absent a reason for the insured’s failure to read the policy, if a policy provision is clear and unambiguous, then the insured’s failure to read the policy provision will insulate the agent from liability for failure to explain that provision.

This holding comports with decisions from other state courts.

[Underwriters Adjusting Co. v. Knight, 193 Ga.App. 759, 389 S.E.2d 24 (1989) (insured’s claim against agent for failure to procure proper insurance is defeated by the insured’s failure to read the policy);

Farm Bureau Mut. Ins. Co. v. Arnold, 175 Ga.App. 850, 334 S.E.2d 733 (1985) (insured’s claim against agent for failure to procure proper insurance was not defeated because a reading of the policy would not have revealed the defect);

Barnes v. Levenstein, 160 Ga.App. 115, 286 S.E.2d 345 (1981) (insured’s claim against agent for failure to procure proper coverage is defeated because reading the policy would have informed the insured of the lacking coverage and because there was no good reason why the insured had failed to read the policy);

Heritage Manor of Blaylock v. Petersson, 677 S.W.2d 689 (Tex.App.1984) (insured had a duty to read the policy and, failing to do so, would be charged with knowledge of its contents).

Town & Country Mut. Ins. Co. v. Savage, 421 N.E.2d 704 (Ind.App.1981) (insured’s failure to read the policy can be raised as contributory negligence);

Martini v. Beaverton Ins. Agency, Inc., 314 Or. 200, 838 P.2d 1061 (1992) (insured’s failure to read the policy can be raised as contributory negligence).

Several courts have held, similarly, that an agent has no duty to explain clear and unambiguous policy terms. [Bush v. Mayerstein-Burnell Financial Services, 499 N.E.2d 755 (Ind.App.1986); Banker v. Valley Forge Ins. Co., 363 Pa. Super. 456, 526 A.2d 434 (1987); Dahlke v. John F. Zimmer Ins. Agency, Inc., 515 N.W.2d 767, 245 Neb. 800 (Neb. 1994)]

When a plaintiff’s admitted failure to read the policy qualifies as comparative negligence a trial court should have permitted the jury to consider whether plaintiff unreasonably failed to read the insurance policy and related documents. [Holman v. Farm Bureau Gen. Ins. Co. (Mich. App. 2022)]

Where a party has reasonable opportunity to read the instrument in question, and the language of the instrument is clear, unambiguous and easily understood, failure to read the instrument bars that party from asserting its belief that the policy contained provisions which it does not. [Jasmen Corp. v. Edwards (E.D. N.C. 2022)]

The Virginia Supreme Court, in General Ins. of Roanoke, Inc. v. Page, 464 S.E.2d 343, 250 Va. 409 (1995) the defendant agent contended on appeal, as it did at trial, that the insured, Page’s, failure to read the insurance policy constituted negligence, as a matter of law, and that such negligence proximately caused his losses and precluded recovery against it.

A person who signs an application for life insurance without reading the application or having someone read it to him is chargeable with notice of the application’s contents and is bound thereby. [Peoples Life Ins. Co. v. Parker, 179 Va. 662, 667, 20 S.E.2d 485, 487 (1942); Royal Insurance Co. v. Poole, 148 Va. 363, 376-77, 138 S.E. 487, 491 (1927).] Similarly, failure of a grantor to read a deed will not relieve him of obligations contained therein. [Carter v. Carter, 223 Va. 505, 509, 291 S.E.2d 218, 221 (1982).] In Metro Realty v. Woolard, 223 Va. 92, 99, 286 S.E.2d 197, 200 (1982) held that absent fraud, one who has capacity to understand written document and signs it without reading it or having it read to him is bound thereby.]

In Oregon, the Supreme Court noted that although the parties and the trial court characterized the issue as whether plaintiff had a “duty to read the insurance policy,” it refused to deal with duty but, rather, emphasized that the issue is not whether plaintiff had a “duty.” Rather, the issues are framed more precisely this way:

May defendant raise plaintiff’s failure to read the policy as a specification of comparative fault?

Was there evidence from which the jury could have found that, in the circumstances of this case, it was unreasonable in the light of foreseeable risks for plaintiff not to read the policy and that plaintiff’s unreasonable failure to read the policy contributed to his damages?

The answer both of those questions was “yes.”

The trial court committed reversible error when it struck defendant’s specification of comparative fault alleging that plaintiff failed to read the insurance policy after obtaining the policy from defendant and when it instructed the jury not to consider plaintiff’s failure to read the insurance policy in assessing his comparative fault. Accordingly, the Supreme Court reversed the trial court. [Martini v. Beaverton Ins. Agency, Inc., 314 Or. 200, 838 P.2d 1061 (Or. 1992)]

In Kentucky, the Supreme Court, unlike other courts, concluded that the trial court erred when it found appellants contributorily negligent by virtue of their failure to read and understand the fire insurance. [Grisby v. Mountain Valley Ins. Agency, Inc., 795 S.W.2d 372 (Ky. 1990)]

In New Jersey, the comparative fault defense traditionally will not apply in a plaintiff’s suit alleging a professional’s malpractice, at least in those cases in which the defendant argues that the plaintiff was at fault in failing to understand or to perform the task for which the professional was hired. The Supreme Court of New Jersey held that the comparative negligence defense is unavailable to a professional insurance broker who asserts that the client failed to read the policy and failed to detect the broker’s own negligence. It is the broker, not the insured, who is the expert, and the client is entitled to rely on that professional’s expertise in faithfully performing the very job he or she was hired to do. [Aden v. Fortsh, 169 N.J. 64, 776 A.2d 792 (N.J. 2001)]

In Frank B. Hall & Co. v. Beach, Inc., 733 S.W.2d 251 the “failure to read” defense was raised after the insured sued the broker, Frank B. Hall & Co., and the carrier for failure to pay a claim, violations of the DTPA and negligence. Hall affirmatively pled failure to read the policies as a defense and the insured’s president admitted that he did not read the policies. Hall contended the trial court erred in failing to submit its requested issue to the jury regarding negligence in failing to read the insurance policies. The court agreed that Hall’s issues on failure to read the policies should have been submitted as to the negligence issue. The court stated contributory negligence was a common-law defense and thus could not be used to defeat recovery under Texas statutes. The court determined this rule was equally applicable to Insurance Code claims and held any contributory negligence attributable to the insured could not defeat recovery on its Insurance Code claims. [Wyly v. Integrity Ins. Solutions, 502 S.W.3d 901 (Tex. App. 2016)]

In conclusion, if insurance companies are to be required to so frame their policies so that the purchaser may easily understand just what he is getting in the way of coverage for his insurance dollar, it is a matter which addresses itself to the sound discretion of the lawmaking authority.

It is not the function of courts to make contracts for the parties nor to protect the unwary purchaser of an insurance policy against his failure to read carefully and understand the extreme limitations of the protection afforded him by the terms of a cheap insurance policy. [Foster v. North American Acc. Ins. Co., 86 S.W.2d 476 (Tex. App. 1935)]

The Law of Unintended Consequences

It took quite a few years but finally the Legislatures enacted the “easy to read” statutes compelling insurers to use common language easily understood by the public. In so doing, policies became less precise and contrary to the intent of the statutes, there is more litigation claiming ambiguities in insurance contracts that must be construed against the insurer. The law of unintended consequences took hold and easy to read policies have grown insurance coverage litigation logarithmically.

(c) 2022 Barry Zalma & ClaimSchool, Inc.

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Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business. He is available at http://www.zalma.com and [email protected]

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