We’re Required to Buy Insurance. But Who’s Making Sure We Understand What We’re Buying?
PERSONAL OPINION / CONSUMER COMMENTARY
The other day, I was driving down Kendall Drive in Miami, looking at the shopping centers and businesses along the road, when something occurred to me.
Insurance is everywhere.
Not necessarily the insurance companies themselves, but the businesses, professionals, and service providers whose livelihoods are connected in one way or another to insurance payments.
Health insurance. Homeowners insurance. Auto insurance. Dental insurance. Vision insurance.
Some businesses sell insurance policies. Others provide services that insurance companies pay for. Some help consumers navigate claims, coverage, and benefits.
And as I continued driving, I started thinking about something that bothered me.
In an economy where insurance plays such a significant role in our lives, how much does the average consumer really understand about what they're buying? More importantly, who is responsible for making sure they understand it?
Insurance Has Become a Necessity, Not a Luxury
For most Floridians, insurance isn't something we can simply choose to live without.
If you have a mortgage, your lender generally requires homeowners insurance. If you finance a vehicle, your lender will typically require comprehensive and collision coverage in addition to legally required auto coverage.
Health insurance may not be legally mandatory for everyone, but going without it can expose a family to enormous financial risks.
Insurance is supposed to provide peace of mind. We pay premiums today in exchange for the promise of financial protection when something goes wrong tomorrow. That's a reasonable concept.
But here's what concerns me: we're asking ordinary people to make complicated financial decisions about products they may not fully understand, often with the guidance of someone who is financially compensated when a sale takes place.
I don't believe that's necessarily wrong. Insurance agents provide a valuable service. Many are knowledgeable, ethical professionals who genuinely look after their customers.
But even good systems need safeguards. And whenever compensation depends on selling a product, I believe we should ask whether the consumer has enough information to make an independent decision.
The Person Selling the Policy May Know Far More Than the Person Buying It
Imagine walking into an insurance agency because your homeowners premium has increased by $2,000. You tell the agent you need something more affordable. The agent finds a policy that saves you $1,500 annually. Wonderful, right? Maybe.
But what if the new policy has a higher hurricane deductible? What if certain types of water damage are excluded? What if the roof coverage is significantly different? What if the policy pays depreciated value rather than full replacement cost for certain losses?
The cheaper policy might still be a perfectly reasonable choice. But only if you understand what you're giving up.
Most consumers compare insurance policies by looking at the premium. Yet the premium is only the price of the promise. The real value of insurance is determined by what happens when you need to make a claim.
A cheaper policy that doesn't protect you when you need it isn't necessarily a bargain.
How Many Consumers Actually Read Their Entire Insurance Policy?
I work in real estate and mortgage financing. I'm accustomed to contracts, disclosures, financial obligations, and documents filled with legal terminology. Even with that professional experience, I recognize how difficult insurance policies can be to interpret.
Now imagine someone who doesn't work with contracts every day. They're raising a family, working full-time, paying their mortgage, managing household expenses, and trying to make ends meet.
Are we really expecting that person to study dozens of pages of insurance language, understand every exclusion and endorsement, compare multiple carriers, and identify every potential gap in coverage? And if they misunderstand something, should the consequences fall entirely on them?
I don't think that's a reasonable expectation.
Florida already has laws prohibiting certain deceptive insurance sales practices. Agents must generally be licensed, and consumers have access to complaint procedures and regulatory resources. Those protections matter.
But having protections on paper and making those protections understandable and accessible to ordinary consumers are two different things.
The burden of understanding a complicated financial product shouldn't rest almost entirely on the person with the least expertise in the transaction.
Follow the Money—and Understand the Incentives
I want to be careful here because I don't believe insurance professionals should be unfairly portrayed as dishonest. The vast majority of people I encounter in professional settings are simply trying to earn a living and serve their customers.
But compensation structures matter. If an agent earns a commission when a policy is sold, that's a financial incentive. If compensation varies between products or insurance companies, that can introduce another consideration.
It doesn't automatically mean the recommendation is inappropriate. It does mean consumers should understand how the relationship works.
Does the agent represent one insurance company or several? Were multiple policies compared? Does the agent receive different compensation depending on which policy is selected? Are there fees in addition to the premium?
These are reasonable questions. And I believe consumers should receive clear answers without having to know exactly what to ask.
Transparency isn't an accusation against the salesperson. It's a safeguard for both sides of the transaction.
What If Florida Made Insurance Easier to Understand?
Here's an idea I would like policymakers to explore. What if every insurance policy sold in Florida came with a standardized, easy-to-read consumer information sheet? Not another 30-page disclosure. One or two pages, written in ordinary language, explaining the information that matters most.
For homeowners insurance, that might include the annual premium and major deductibles; the amount of coverage and how claims are valued; the most significant exclusions and limitations; whether flood damage is covered; what changed compared with the previous policy; whether the agent receives commissions or other compensation; and where consumers can go for independent assistance.
Imagine being able to compare two policies side by side without needing to become an insurance expert. The full legal contract would still exist. But the consumer would have a practical tool to understand the decision before signing.
This isn't an entirely new concept. Federal health insurance rules already require standardized summaries of benefits and coverage for many health plans. Why couldn't we explore similarly understandable disclosures across other major insurance products?
I recognize that implementing additional requirements could create costs, and those costs would need to be considered. But shouldn't we at least examine whether better disclosure could prevent costly consumer mistakes?
Florida's Affordability Problem Is Bigger Than Property Taxes
Recently, I've been thinking about Florida's proposed property-tax Amendment 3 and the larger debate about making homeownership more affordable. I understand why reducing property taxes appeals to homeowners. Every dollar matters, especially when the cost of living continues to put pressure on household budgets.
But I keep coming back to a larger question. Are we addressing the actual causes of unaffordability, or are we concentrating on one expense while overlooking others?
Property taxes are one part of the cost of owning a home. Insurance is another. So are mortgage payments, maintenance, association fees, utilities, and unexpected repairs.
If a homeowner receives property-tax relief but continues facing substantial insurance expenses, the overall affordability challenge remains.
And if consumers don't fully understand the insurance products they're purchasing, they may face financial surprises precisely when they can least afford them.
I don't believe we can have a serious conversation about housing affordability in Florida without examining the insurance system alongside taxes and housing costs.
That doesn't mean consumer-disclosure reforms alone will lower premiums. Insurance prices also reflect storms, rebuilding costs, claims, reinsurance, and other financial risks.
But affordability isn't only about what we pay. It's also about what we receive in return.
Consumer Protection Shouldn't Require Consumers to Become Experts
This is where I believe government has a legitimate responsibility. I don't think the solution to every problem is another law, another agency, or another layer of bureaucracy. And I certainly don't believe every business needs more paperwork.
But I do believe one of government's fundamental responsibilities is to establish fair rules when consumers are purchasing complicated products that can have major financial consequences.
That doesn't mean government should make every decision for us. It means making sure we have the information necessary to make those decisions ourselves. There's a difference between protecting consumers and controlling them.
I would like to see Florida take a closer look at whether its existing insurance oversight provides enough meaningful protection before policies are purchased—not just after complaints arise.
Are disclosures understandable? Are important exclusions presented clearly? Can consumers easily compare policies? Are compensation arrangements transparent? Are complaints investigated effectively? And when companies or agents violate the rules, are the consequences sufficient to discourage repeat behavior?
These are questions worth asking regardless of political affiliation.
We Shouldn't Have to Discover What Our Insurance Doesn't Cover After a Disaster
Think about a Florida family that has spent years paying homeowners insurance premiums. A major storm hits. Their home suffers extensive damage. They file a claim, believing they're protected.
Only then do they discover that a particular type of damage isn't covered, their deductible is much larger than expected, or their settlement is calculated differently from what they understood.
Sometimes those limitations are legitimate and clearly disclosed in the contract. But that doesn't necessarily mean the family understood them.
And while personal responsibility matters, I believe there should also be a responsibility on the part of the insurance industry and regulators to make critical information understandable before the policy is sold.
We should not design a system where consumers discover the most important details of their coverage only after something terrible happens.
The Kind of Florida I Want to See
As someone who works with people buying homes, financing properties, and making some of the largest financial decisions of their lives, I see how important trust and transparency are.
People don't always need the cheapest option. They need to understand their options. They need to understand the tradeoffs. And they need confidence that the people advising them are being transparent about what they're recommending.
I believe we can support insurance professionals, maintain a competitive insurance marketplace, and still demand stronger consumer protections. Those goals don't have to conflict.
Just as I believe we should follow the money when examining local government budgets, I believe we should follow the incentives when examining industries that sell essential financial products. Not to assume wrongdoing. But to understand whether the system is working as intended—and for whom.
That drive down Kendall Drive left me thinking about how much of our everyday financial lives depends on insurance.
We pay for it when we own a home. We pay for it when we drive. We pay for it when we seek medical care. Sometimes we pay directly. Sometimes the cost is built into the products and services we purchase.
Insurance is woven into the financial foundation of modern life. And for something so important, I believe we should be asking more questions about how consumers are protected.
If insurance is important enough that we require people to purchase it in many circumstances, shouldn't understanding what they're purchasing be made equally important?
I don't pretend to have every answer. But I think it's time we ask better questions. And I think Florida consumers deserve clear answers.
Chris Manzano is a South Florida real estate and mortgage professional. This article reflects his personal opinions on housing affordability, insurance transparency, and consumer protection. It is intended to encourage informed public discussion and does not constitute legal or insurance advice.
Sources and Further Reading
Florida Statutes, Chapter 626 — Insurance Field Representatives and Operations: https://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0626/0626.html
Florida Statutes, Chapter 627 — Insurance Rates and Contracts: https://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0627/0627.html
Florida Department of Financial Services — Consumer Services: https://www.myfloridacfo.com/division/consumers
HealthCare.gov — Summary of Benefits and Coverage: https://www.healthcare.gov/health-care-law-protections/summary-of-benefits-and-coverage/
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