Arizona May Not Uphold Non-English Insurance Contracts

While English is the lingua franca of the U.S., many businesses also understand that offering service in other languages makes sense, since not all of their customers are proficient in English. Those companies include insurers — especially those that offer home insurance.

To help aid consumers, a healthy number of insurance companies have Spanish-speaking services or offer contracts in Spanish or other languages. Allstate, for example, allows users to browse a Spanish-language version of their website. Since 2018, however, some state legislators in Arizona have been trying to make English the only legally binding language for insurance contracts. Such a move would create a number of potential issues for Spanish-speaking consumers in the state.

What is Arizona House Bill 2083?

Arizona House Bill 2083 would mandate that all insurance contracts in the state be written in English. The move could potentially void contracts currently written in other languages, including Spanish. And in cases where the wording in the different versions of the contract is contradictory, the English version would take legal priority, even if the insured consumer can’t read or fully understand the English version of the document.

Is Arizona House Bill 2083 the right move?

The law’s opponents charged that such a move would not only be discriminatory but also potentially lead to an increase in fraud. Since some customers would still want to read a contract in their own language, even if the one they actually sign is in English, unscrupulous insurers could purposely transcribe a contract into another language incorrectly. That might lead to the insured agreeing to higher premiums, additional fees or more limited coverage than they expected.

Proponents, however, say the bill will actually reduce the risk to insurers, incentivizing them to write more contracts in non-English languages. For example, a Nationwide Mutual Insurance Company lobbyist is reported to have said such a mandate would add a "layer of protection" in the case of lawsuits.

The logic to that position is that the bill would disallow any variation introduced in the translated version to have any legal weight. According to the bill, "An insurance policy that is translated into a language other than English and that is issued for delivery by an insurer in this state does not amplify, extend or modify the terms of the English language version of the policy." What this means for both the insured and the insurance company is that any non-English translation of a contract cannot add to that contract.

The proposed amendment also sets in place that the law only qualifies if the policy has been clearly marked to identify the English version as the legally binding version.

Based on the law’s language alone, it could be a bit of stretch to call the bill racist. However, opponents may have an argument regarding the difficulties that arise for those who do not speak English fluently.

While the law could allow insurance companiesto be more liberal in writing policies in other languages, literal translations from English to other languages are rarely exact. Confusions can and will happen. Whether intentionally or not, the law would seem to indicate that non-fluent speakers would be on the short end of the stick should any language disputes arise.

What does it mean if Bill 2083 is passed?

Should the bill pass, two things might happen. One, insurance companies may feel more inclined to write policies in Arizona for speakers of other languages. With the added protection of legal disputes resting solely on the English version, the risk to the insurance company of language confusions resulting from poor or faulty translations costing them money will be reduced.

Two, those who speak other languages will have a greater incentive, even necessity, to hire legal and translation services to ensure the efficacy of the contract. That will at least add an additional step to the process, and might well require an added expense, too.

While a bill targeting the language used in insurance contracts is fairly uncommon, it isn’t unique. Other states and even the U.S. Congress have attempted similar bills in the past. Republicans on Capitol Hill have pushed the English Unity Act several times in the past, most recently in early 2021.

In Oklahoma, English was made the official language of the state via a ballot vote back in 2010, although it was unclear what, if any, documentation would be mandated to be in English. And in Missouri, state legislators have consistently backed a law that would have mandated English-only driver’s tests.

Consistently, however, whenever such laws come up, they are either unpopular or minimally restrictive. Should Arizona’s English-only insurance contracts law pass, the state will undoubtedly be watched closely for any potential fallout.