Abstract
An investigation to balance the sustainability of insurance companies and successful claims on insurance policies is important towards the economy, as well as for assisting the insured during financial difficulty when their items are damaged or lost. This paper examines some rejected short-term insurances where a misunderstanding of the contract might have caused the insurer to lose out on the claim. Data were collected from cases of courts and insurers on rejected claims due to misunderstandings by the insured. The first text data set was a court case. The second was a graph on the root causes of claims rejections from the insurer. The third was a matrix data set presenting the languages of the insured. The insurers who had refused to pay insurer claims supplied the latter two. Despite the three contexts being widely different, their results show that rejections of claims by the insurers were due to the insured failing to understand the conditions of the contracts, and thus not being able to figure out what could have caused the rejection. Hence, the use of complicated and legal language in insurance contracts results in the insured not fully understanding the contract, which leads to claims being rejected. The paper recommends the use of simple language and pinpointing in layman's form, those aspects that could lead to rejections of claims.
Publisher
Center for Strategic Studies in Business and Finance SSBFNET
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