'If It's Easy to Read, It's Easy to Claim' — The Effect of the Readability of Insurance Contracts on Consumer Expectations and Conflict Behaviour

J Consum Policy 2016 (DOI 10.1007/s10603-016-9317-9)

11 Pages Posted: 5 Apr 2016

See all articles by Willem H. Van Boom

Willem H. Van Boom

Leiden Law School

Pieter Desmet

Erasmus University Rotterdam (EUR) - Erasmus School of Law

Mark van Dam

MRT Rechtsbijstand

Date Written: March 30, 2016

Abstract

In the area of financial services, lawmakers and regulators increasingly promote the use of plain language in business-to-consumer contracts. Although such efforts are undoubtedly welcomed by consumers, as they promote better comprehension, not much is known about the actual effects of improved readability on consumer attitudes and cognitive processes. Does improved readability in general contract terms have an impact on the consumer’s perception of their contractual position? Do contracts that are easier to read influence the steps or actions taken by consumers in the wake of conflict? In response to these questions, we present data from an experiment that investigates the relationship between the reading ease of general contract terms on the one hand and consumer expectations and willingness to engage in conflict on the other. Our findings suggest that readability increases the trust and confidence of the consumer in the sense that it increases their expectations of the claim. Moreover, we have found partial evidence to suggest that reading ease also increases the consumer’s willingness to engage in legal action in the case of subsequent claim denial.

Keywords: Plain language, Reading ease, General contract terms, Conflict engagement

JEL Classification: K12, K20, K40

Suggested Citation

Van Boom, Willem H. and Desmet, Pieter and van Dam, Mark, 'If It's Easy to Read, It's Easy to Claim' — The Effect of the Readability of Insurance Contracts on Consumer Expectations and Conflict Behaviour (March 30, 2016). J Consum Policy 2016 (DOI 10.1007/s10603-016-9317-9), Available at SSRN: https://ssrn.com/abstract=2756522

Willem H. Van Boom (Contact Author)

Leiden Law School ( email )

P.O. Box 9520
2300 RA Leiden, NL-2300RA
Netherlands

HOME PAGE: http://www.professorvanboom.eu

Pieter Desmet

Erasmus University Rotterdam (EUR) - Erasmus School of Law ( email )

3000 DR Rotterdam
Netherlands

Mark Van Dam

MRT Rechtsbijstand ( email )

Postbus 729
Hoogeveen, 7900 AS
Netherlands
+31 88 299 3932 (Phone)

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