Reading Your Policy

When reading your insurance policy, you must remember to read the entire policy. Coverage may seem to be granted in one section, but restricted or excluded by a later section. Most insurance companies now provide "Easy to read policies." This helps the Agent, Claims Representative, and Policyholder to know what to expect. It is best to be familiar with each section of any policy. While there are many insurance policies and kinds of property, all insurance policies have the same general parts:

• Policy Declarations (Or Dec Page)
• Insuring Agreement
• Definitions
• Coverage, including Exclusions and Limits
• Conditions

Policy Declarations

This is a page separate from the policy jacket, or in some cases, an attachment to the policy. It contains the name, address, description of the insured property (Auto, Home, etc.), coverage purchased, coverage limits, and other pertinent information. Additionally, the Dec Page also states the policy period, including effective date and expiration date.

Definitions

This section of the policy defines words and phrases used throughout the policy. For example: motor vehicle and deductible are two terms frequently defined in the auto policy. Whenever these terms are used in the policy, they are boldfaced so that the policyholder knows that these words have a particular meaning in the insurance contract.

Policy Coverage & Exclusions

Policy coverage describes the specific insurance provided, usually by listing what property is covered for what perils. Exclusions is the part of the coverage sections of the policy that limits or eliminates coverage otherwise provided in your policy. Insurers often will allow policyholders to buy back coverage for some exclusions.

Limits & Special Limits

This part of the coverage section explains how much the insurer will pay for particular losses. That is, while a loss may be covered by in the insurance, it may be covered for only a limited dollar amount or for a limited percentage of the entire loss under certain circumstances.

Conditions

This section of the policy lays out the ground rules by detailing the responsibilities of the insured and Insurer. This includes items such as how to cancel a policy. Frequently, one common condition is subrogation, which is the concept that once the Insurer has paid a claim, the right to recover payment from the at-fault party belongs to the Insurer. Conditions may also address monthly payments plans.

Duties After A Loss

Your policy itemizes specific duties of the insured after an accident or loss. These duties may include notifying your Insurer as soon as practical, notifying the police in case of theft, and protecting the property from further damage.

Endorsements

These attachments modify the policy to better fit the policyholder's needs. Amendatory endorsements modify the policy because of changes in the policy language by the company. Excluded perils can be covered with an endorsement to the policy. Endorsements are not restricted to perils. They can also add specific items, such as adding an additional driver to an automobile policy. In the case of an amendatory endorsement, they may change a policy definition.