Unpacking My Insurance Policy
February 5, 2019 | by BMI Staff
The declarations page of your insurance policy is found at the front. It acts as a summary of both your coverages and conditions. It contains the “Who, What, When, Where, and How Much” of the policy.
- Who: This states which people are insured, so make sure everyone who needs to be on the policy is listed in this section.
- What: This states everything that is insured within the policy, including personal property and liability. In addition to defining the property that is covered, this section also discusses the causes of loss for which each item is covered.
- When: This states the time frame during which your policy will be active.
- Where: This states the location(s) of all of your insured property.
- How much: This states the specific coverage limits you’ve chosen to protect you and your property.
Each policy form will contain legalistic definitions for terms that are used throughout the document. While these definitions may be clarifying to some extent, they exist more to make sense of the form than they do to educate the reader. For more informative explanations of commonly confused insurance jargon, take a look at our article on demystifying the world of insurance.
Coverages & Liability Limits
Each policy contains a list of coverages, detailing every specific risk that has been taken over by your insurance company. This section goes over the degree to which a risk is covered, the exceptions to any given coverage, and the qualifications that are used to determine coverage. Even if you don’t read this section in its entirety, keep the document in a safe place so you may refer back in the event of an accident.
After reading the coverages included in your policy, don’t forget to take a look at the exclusions section. This section details the coverages that are not included in a given policy. These exclusions vary depending on which form is used, and they exist to better define the coverages within the policy. Exclusions serve a variety of purposes within a policy. A risk may be excluded under one policy type because it is included in another, eliminating the repetition of coverage. A risk may be considered too catastrophic to cover, such as the case with war. If a risk is considered easy to control, and a claim would only be the result of neglect, that risk may also be excluded. These examples and others like them explain why exclusions are an important part of any insurance policy. Understanding the boundaries of your coverage will help you determine what limits have been set on your insurance. Take a look at your exclusions page to find out just that.
The conditions section comes next, and this includes the rules of the policy. An insurance policy is a legally binding document that requires clearly stated boundaries in order to protect all parties entering into the agreement.
Endorsements come last in the policy, and they act as amendments to the policy by altering a scope of coverage provided by the insurer. Many endorsements are voluntary, adding an extra cushion of coverage to the existing policy. BMI offers several of these, like our Auto-Plus Endorsement.