"Or is the bigger problem that many people don't read the fine print and somehow assume the insurance will pay?"
This fine print alone shows the mentality of insurance companies. Why can't all the wording be the same?? Don't answer that.
Is there an insurance ombudsman in Thailand?? Even if there was, brown envelopes will talk TiT. These companies seem to have a licence to scam and con people, yes of course there are people who will say I'm wrong and their insurance company have paid out, but look at it from a wider point of view, do I need to say more?