One of the most cumbersome aspects of a denial letter is the often-abrupt transition from letter to legalistic policy language to establish what the policy says regarding a particular type of incident. Claims people refer claimants to the policy in order to demonstrate that a particular type of loss is not covered in the policy.
Just quoting the policy, however, is not as simple as it sounds. Problems occur when the quoted policy, which is filled with legalese, is transposed to the letter with poor formatting or when the denial writer neither prepares the reader for the policy nor summarizes its key point but just refers him or her to it as though it was self-explanatory.
Here are six tips on making policy language more readable. They are drawn from hundreds of denial letters I have seen while teaching my one-day on-site Effective Writing for Claims Professionals seminar at insurance companies and claims associations across North America:
- Indent the policy quotation. If the policy language has the same margin as the rest of the letter, the reader may not be aware when the letter writer has switched to policy language. Indenting the policy passage immediately helps the reader make the transition.
- Space it for maximum readability. In an effort to save space, the denial letter writer often chooses to delete the spaces between sections that occur within the policy. Spacing is as important to comprehending policy language as it is to comprehending any other type of writing. Don’t leave out spaces between policy sections and subsections, if they exist in the policy.
- Use a different typeface to make the policy language stand out. By switching from one typeface (for the letter) to another (for the policy language), you allow readers to visually differentiate letter from policy language.
- Use ellipses (…) to show omissions within the quoted policy sections. An ellipsis (…) is the proper punctuation to show that you have omitted some policy language in your desire to focus solely on those parts of the policy that pertain to the reader’s claim. They play fair with the reader by indicating that the reader has chosen to omit certain sections, words or phrases in the policy.
- Use italics and boldface to highlight points—but tell the reader they are yours. You may choose to italicize or boldface parts of the quoted policy language, but you then have to give your reader the message that you – the letter writer – are commenting on the policy. Do this by putting your comment in brackets [ ]. For example, [Italics mine].
- Lead in to policy language with a paraphrase of the salient point. Too many claims people just drop the policy quotation in their letters without any prefatory comment except “please refer to the following….” The writer should prepare readers for what they are about to read in the policy by paraphrasing a key point (e.g., “These next three paragraphs of policy language discuss some of the types of weather conditions that are not covered in your policy.”). Also, after concluding the policy quotation, make a smooth transition back into your letter by either commenting on the quotation or by relating the key points to the reason you give for denying coverage. (e.g., So, as you can see from the policy, when a rodent chews a hole in the pool liner, coverage is excluded. Therefore, we must deny your claim.”).
The following letter is a good example of how NOT to quote policy language in a letter. The writer may not be able to change the policy language but can at least lead into the policy more smoothly, paraphrasing the legalistic sentences the reader is about to read:
February 25, 2017
Date of Loss: January 20, 2017
Claims Number: 3490
Policy Number 143739
Insured: Rick Mooney
Mr. and Mrs. Mooney:
This letter is regarding your claim for fire damage sustained to a 2017 feed wagon, owned by Marshall Farm Supply, Inc., occurring on January 20, 2017.
There is no coverage for this loss within your XXX Personal Liability Coverage
Policy form 400-1(08-08) as follows:
Page 12 and 13 of 20 exclusions
F. Coverage L – Liability
Coverage does not apply to:
“Property damage” to property rented to, occupied or used by or in the care of an “insured,” except for the “property damage” to the “insured locations” that is caused by fire, smoke, or explosion;
Page 14 of 20 Additional Coverages
C. Coverage N – Damage to the Property of Others
2. We will not pay for property damage
c. Arising out of:
(1) Professional services, a “business” or “farming” operation engaged in by an “insured”
Additionally, there is no coverage under your policy for
Page 15 of 20 “Optional Coverages”
A, Coverage D-Damage to Farm Equipment of Others.
We regret that we are unable to make payment for this claim based on the policy provisions. We hope this letter explains our position. If you have any questions after reviewing this letter you may reach me at 666-6666 or e-mail email@example.com.
While the writer tries to use boldface to make the policy read better, it doesn’t help. What would help would be a sentence leading into the policy language that says: “There is no coverage for your feed wagon according to the following three sections of your policy.”
With more and more judges insisting that insurance letters sound less boilerplate and more original, claims professionals need to rethink the formatting, phrasing and organization of their denial letters or insurance companies may find themselves denied the verdicts they seek when squaring off against a claimant in a court of law.