Section R20-6-210. Readable and Understandable Policy: Private Passenger Automobile, Homeowner, Personal Line Dwelling, and Mobile Homeowner

A.      Definitions. The following definitions apply in this Section:

1.        “Readable insurance policy” means a policy that can be read and reasonably understood by a person without spe- cial knowledge or training.

2.        “Policy” means a contract or agreement for insurance, or an insurance certificate regardless of the name used, and includes all clauses, endorsements, and papers attached or incorporated.

B.       Scope. This Section applies to private passenger motor vehicle policies, homeowner policies, personal line dwelling policies, for four family units or less, and mobile homeowner policies delivered or issued for delivery in Arizona.

C.      Compliance.

1.        An insurer shall test the readability of its policy by use of the Flesch Readability Formula as set forth in Rudolf Flesch, The Art of Readable Writing (1949, as revised 1974).

2.        An insurer shall not use a policy unless the policy has a total readability score of 40 or more on the Flesch scale.

3.        An insurer shall include with each policy form filing required to be filed with the Director a checklist for the line of insurance setting forth the Flesch score.

D.      Readability guidelines.

1.        General organization of text.

a.         A policy shall be divided into logically arranged sec- tions for ease of locating content.

b.        Each section shall be self-contained as to provisions relating solely to that section (for example, an exclu- sion section shall not be mixed with other parts of a policy).

c.         General policy provisions applying to all or several like coverages shall be located in a common area.

d.        The policy shall not contain non-essential provi- sions.

e.         Defined words and terms shall be placed in a sepa- rate section at the beginning of the policy.

2.        Visual aids to readability. The insurer shall ensure that each policy meets the following format requirements:

a.         Type size shall be at least eight point.

b.        The font shall be block print rather than script, and legible.

c.         Captions and headings shall be distinguishable from the general text.

d.        White space separating coverages, policy sections, and columns shall be sufficient to make a distinct separation.

e.         Defined words and terms shall be distinguishable from the general text.

3.        Language usage. The insurer shall ensure that each pol- icy:

a.         Is written in everyday, conversational language;

b.        Uses short, simple sentences and words in common usage;

c.         Uses an easy-to-read style, personal pronouns, and present tense active verbs.

Historical Note

Adopted effective May 28, 1979 (Supp. 79-1). R20-6-210 recodified from R4-14-210 (Supp. 95-1). Former R20-6- 210 renumbered to R20-6-208; new R20-6-210 renum- bered from R20-6-212 and amended by final rulemaking at 13 A.A.R. 2061, effective August 4, 2007

(Supp. 07-2).