Comparison literacy

How to read an insurance comparison.

A comparison is useful only when the two options respond to a similar risk under similar assumptions. Start by checking whether the proposals are actually comparable.

Check the structure

Compare the named insured, policy period, coverage form, limits, sublimits, deductibles, territory, defense costs, and endorsements. Ask whether the policy is claims-made or occurrence-based where relevant.

Read exclusions and conditions

Look for exclusions, warranties, notice requirements, cooperation duties, prior-acts terms, consent-to-settle provisions, and conditions that could affect a claim. The headline summary cannot replace the policy wording.

Use a four-column worksheet

• Exposure: What loss scenario is being addressed?
• Response: Which insuring agreement, trigger, limit, or service responds?
• Gap: What exclusion, deductible, waiting period, or sublimit remains?
• Verification: Which policy document, regulator, broker, or carrier confirms the interpretation?

Include service and claims handling

Ask who handles claims, what response services are included, whether vendors are approved, and how a dispute or coverage question is escalated. A lower premium may come with different service, narrower terms, or higher retained risk.