Insurance policies need clearer language to help customers and cut down on complaints: IRDA panel

Insurance companies need to use clear, straightforward language in policy terms and conditions to help reduce customer complaints, according to Pushpa Girimaji, a member of IRDA's Insurance Ombudsman Advisory Committee. At an event celebrating the foundation day of the Insurance Ombudsman, Girimaji highlighted the importance of making policy documents easy to understand, which could help prevent misunderstandings and customer grievances.

For many customers, insurance policies can be hard to decipher, with technical language, confusing terms, and hidden clauses. These complexities often lead to misunderstandings about coverage, exclusions, and claim procedures, resulting in high levels of frustration and complaints.

Girimaji also pointed out the need to minimise "non-entertainable complaints" — cases where complaints are dismissed by the Insurance Ombudsman because the issues raised do not meet specific criteria or are outside the scope of the ombudsman’s authority. By simplifying policies, insurers can help customers better understand what they are signing up for, potentially reducing the number of non-entertainable complaints.

Girimaji emphasised that insurers must be fair in handling customer claims. Misunderstandings due to unclear terms can often result in valid claims being denied, leading to distrust in the insurance sector. Fair and transparent communication can build stronger relationships between insurers and customers, enhancing trust and reducing grievances.

Clearer policies could make it easier for policyholders to know their rights, understand coverage limitations, and follow the correct claim procedures. By using simple, accessible language, insurance companies can ensure that customers fully comprehend what their policies offer, helping them make informed decisions and reducing disputes down the line.

(With inputs from agencies)