Policy Wordings & Plain Language

The Policy Wording Is the Product

The marketing brochure, the agent's pitch, the company's reputation are all secondary. The policy wording is the legal contract that defines what the customer has actually bought. When a claim is disputed, the wording is what matters.

In Ghana, NIC has pushed for plain language policy wordings. This is good for customers and good for the industry. When customers understand what they've bought, they're less likely to feel cheated at claims time, which reduces complaints and improves trust.

Anatomy of a Policy Wording

Every policy wording contains these core elements:

Definitions: What do key terms mean? 'Accident', 'insured event', 'sum insured', 'excess': each must be precisely defined. Ambiguity here is the #1 source of claims disputes.

Coverage: What events trigger a valid claim? Be specific. 'Fire' means accidental fire: does it include arson by a third party? Does it include electrical fire? Does it include fire spread from a neighbouring property?

Exclusions: What is NOT covered? This is where trust is built or destroyed. Exclusions must be clearly stated, genuinely justified (not used to avoid paying claims), and explained to the customer at point of sale.

Conditions: What must the policyholder do? Reporting timelines, security requirements, maintenance obligations. These must be reasonable: a condition requiring claims notification within 24 hours may be unrealistic in rural Ghana.

Claims Procedure: Step-by-step process for making a claim. Documentation required, timelines for insurer response, dispute resolution mechanism.

Schedule: The personalised details: policyholder name, sum insured, premium, period, specific items covered.

Common Wording Mistakes in the Ghanaian Market

Copying international wordings without adaptation. A UK fire policy excludes 'riot and civil commotion' as a separate peril. In Ghana, where market fires sometimes involve civil disturbance, this exclusion needs careful thought.

Unrealistic conditions. Requiring original receipts for all contents claims when most Ghanaian traders don't keep receipts. Design the product around the reality, not the ideal.

Vague exclusions. 'Wear and tear' is commonly excluded in motor policies, but what counts as wear and tear versus a legitimate mechanical failure? Define it clearly or face disputes.