Issues in determining the scope of insurance policy coverage : what are the main issues and respective possible solutions in determining the scope of insured risks and related compensation within insurance policies?

Abstract

As the insurance companies play a major public role for the society’s well being, the insurance policy terms or rates are usually strictly regulated by the state. That is to say, in most cases, even when speaking about voluntary policies, insurance companies are not totally free to state certain provisions in their regulatory policies or else make amendments to them. That is one way to lessen misunderstanding and any obstacles for the policyholders in understanding the policy terms. In other words, state regulatory is considered as a tool for customer protection in the sphere of insurance. State’s strict regulatory helps to decrease the misinterpretations and arguable cases regarding the insurance policies. This basically concerns the compulsory insurance policies, inasmuch as the state commissioner (in case of MTPL the state commissioner is the Bureau of car insurers) bargains over the policy terms in favor of potential policyholders. In this regard, it is important to clarify the list of risks when declaring the scope of insurance policy coverage, also to find solutions both for the phase of writing the agreement provisions and interpreting those provisions during any conflict regarding its implementation. In this regard it is important for the courts to view the policies in certain light, which affects the conflict settlement results.