The Need to Read an Insurance Policy
Posted on August 27, 2026 by Barry Zalma
Courts Have Established a Duty to Read an Insurance Policy
Post 5436

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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 whether it provides the coverage requested. If a loss that could be subject to insurance 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 B at the very least B have, a lawyer or insurance professional read, understand and explain the policy to the person acquiring the insurance.

For the last 58 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 Ayes@ only to find 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. Before beginning to read an insurance policy you seek you must first understand what insurance is.
What is Insurance?

Many states have different definitions of the word Ainsurance@ but each have the same essential elements:

It must be a written contract.
One party (the insurer) must agree 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 events.

Insurance is a contract like all other contracts. Lawyers and judges believe 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 universally not read by the person insured. Some are not read by the agent, broker or underwriter who sell the insurance, nor 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.

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 ASesame Street English.@ There is no reasonable excuse available for not reading an insurance policy.

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.
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 lawyer, risk manager, insurance consultant, agent or broker advised the insured about the contents of the policy.
Determine if any mistakes were made in the production of the policy wording.

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) 2026 Barry Zalma & ClaimSchool, Inc.

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