I think you are conflating two things. Insurance companies want to know as precisely as possible to determine their liability. It is the essence of their job.

I think you are conflating two things. Insurance companies want to know as precisely as possible to determine their liability. It is the essence of their job. Now, what they communicate to customers is another thing. I bet they know very well what they are getting into... but I agree they aren't likely to be transparent with you about it.