insurance-policy-decoder

Insurance Policy Decoder Skill

Insurance policies are read twice: at signing (by no one) and after the loss (too late). This skill does the first reading properly — what each coverage line pays in a real scenario, which exclusions swallow which promises, and whether "covered" means replaced-new or depreciated-to-pennies. The declarations page is marketing; the exclusions and definitions sections are the policy.

What This Skill Produces

• A coverage-by-coverage decode with a concrete payout scenario for each ("kitchen fire, $40k damage → policy pays X because…")
• Ranked red flags: exclusions that gut headline coverage, sublimits, ACV traps, coinsurance penalties
• The ACV vs. replacement-cost math, shown on the user's actual property
• Questions for the agent — gaps found, endorsements worth pricing, and what to get in writing

Required Inputs

Ask for these only if they aren't already provided:

• The policy documents — declarations page at minimum; exclusions/definitions sections if available. With only a declarations page, decode what's visible and list the sections still needed — the exclusions are where the reading matters.
• What's being protected — home value and contents ballpark, or vehicle + how it's used; anything unusual (home business, expensive equipment, a finished basement in a rain-prone area).
• Their worry list — the losses they actually fear; the decode ranks against those.

Framework: Severity Scale

• 🔴 Can cost you real money — actual-cash-value settlement on roof/contents (depreciation eats the payout), water/flood/sewer-backup exclusions (the most commonly discovered-too-late gap — flood is almost never in a standard policy), sublimits far below stated property ("jewelry: $1,500 total"), coinsurance clauses (insure below X% of value → every claim penalized proportionally), ordinance-of-law gaps (rebuilding to current code isn't covered by default), business-use exclusions voiding claims for home-office equipment or delivery driving.
• 🟡 Unusual — probe before renewal — high or percentage-based wind/hail deductibles (2% of dwelling ≠ 2% of the claim), depreciation on partial roof claims, named-perils contents coverage masquerading as comprehensive, rental-car and loss-of-use caps that run out mid-repair.
• 🟢 Standard — normal liability structures, standard deductibles, ordinary named exclusions (war, wear-and-tear); label them so the reader can stop worrying.

Always show the math: ACV example (10-year-old roof, $30k replacement, 25-year life → depreciated payout ≈ $12k minus deductible — compute it); coinsurance example if the clause exists; sublimit audit against the user's actual valuables. Where a term is defined in the definitions section, the defined meaning wins over the plain-English one — quote it.

Output Format

Policy Decode: [type — carrier, policy period]

1. The verdict — the three findings that most change what this user thinks they have, in plain sentences.

2. Coverage decode

| Coverage line | Limit / basis | What it pays in a real scenario | Severity |

|---|---|---|---|

3. 🚩 Red flags, ranked — quoted exclusion/definition text, the scenario where it bites, the dollar gap.

4. The math section — ACV vs. replacement worked on their property; deductible reality (percentage deductibles in dollars); sublimits vs. their actual valuables.

5. Questions for the agent — coverage gaps to price (flood, sewer backup, scheduled valuables, replacement-cost endorsement), and which answers to get in writing.

End the artifact with, verbatim: "This is a plain-language reading, not legal/financial advice — laws vary by jurisdiction; confirm anything load-bearing with a qualified professional."

Quality Checks

• [ ] Every coverage line gets a concrete payout scenario, not a restatement of the limit
• [ ] ACV vs. replacement cost is computed on the user's numbers, not explained abstractly
• [ ] Percentage deductibles are converted to dollars
• [ ] Exclusions are quoted, and defined terms use the policy's definition
• [ ] Sections not provided (exclusions, definitions) are named as gaps, not assumed standard
• [ ] The disclaimer line appears verbatim in the artifact

Anti-Patterns

• [ ] Do not invent coverage terms or limits that aren't in the documents
• [ ] Do not soften a red flag to seem balanced — an ACV roof on a 15-year-old roof is a small payout, say so
• [ ] Do not present jurisdiction-dependent rules (claim deadlines, bad-faith standards) as universal
• [ ] Do not rank by section order — rank by the user's stated worries and the dollar gaps
• [ ] Do not recommend carriers or price coverage — decode this policy; shopping is the user's move

Based On

Policyholder-side coverage review practice — declarations/exclusions reconciliation, payout-scenario testing, sublimit auditing.