Insurance is a huge part of our daily lives, and when you get a new plan you are flooded with forms and contracts. But do you really know what all the forms are and what they mean? One form, the most important form is your insurance contract. This is an important piece to be familiar with because it’s the main document you reference whenever your policy is brought up. It’s the main source of information describing your obligations and your insurance provider’s.
It doesn’t take long to understand this document. We’ll get you up to speed in no time at all.
Know Your Terms
Probably the quickest way to lose someone is to speak in insurance lingo. For someone outside the industry, the lingo can get confusing. Here is a general list of broad insurance terms to get you on the same page:
- Beneficiary– a person named in a policy that receives the benefits
- Policy Owner or Holder– person who holds the plan
- Premium– the amount paid to the insurance company to keep the policy valid
- Deductible– the amount you pay out-of-pocket every year before the insurance company begins assisting
- Carrier– the insurance company providing your policy
- Claim– a formal request for benefits by the insured to the carrier
Everyone’s contract will be a little different, depending on the policy type. Your document should have a list of definitions in it describing what they mean.
Declarations Page
The first step anyone will tell you is to locate the declarations page and read that first. Fortunately, it comes before anything else in the insurance contract and has an overview of both the policy and you as the insured. If you’re looking for specifics, on the declarations page, you’ll find:
- Who or what is insured
- How long the policy will provide coverage
- The deductible
- The plan’s dollar limits
- Your expected payment (premium)
- When your payments are due
If you’re looking for answers, the declarations page is the place most likely to have them. General policy and payment details are contained therein and should be formatted to be easily read.
Insuring Agreement
This is the meat of your contract as it covers everything the carrier will be responsible for. After you’ve familiarized yourself with the terms and oriented yourself with the declarations page, this portion will give you the in-depth look at what benefits you’ll receive from your policy.
There are two distinct types of insuring agreements that you should be aware of:
- Open Perils Coverage– Previously known as “All Risk” the name was changed in the industry recently to clarify that it does not actually protect from “all” risks. This plan covers everything except for exclusions named in the contract.
- Named Perils Coverage– This policy type is much more specific and details each loss that the carrier will cover, rather than state only exclusions.
You’ll find both policy types outlined considerably in this section as the carrier wishes to keep everything as clear as possible. Coverage definitions are specific for a reason.
Exclusions & Modifications
These are grouped together as the side-dishes if we’re sticking with the food metaphor. Exclusions are detailed examples of what the carrier will not provide coverage for in the policy while modifications (or endorsements) are the alterations made to the original contract. Here are examples of both exclusions and modifications:
Exclusions:
- Theft exclusion
- Freezing pipes and systems in a vacant property
- Settling, wearing of property
- Government actions
Modifications:
- Additional storm coverage
- Home business coverage
- Detailed property item coverage (valuables or otherwise)
Conditions
Lastly, you should review the requirements to maintain your coverage. After taking note of everything in your contract, you don’t want to miss out on benefits because you failed to meet the conditions outlined in the document.
These are actions you as the insured must take to keep your policy valid. For example, one popular condition added to most contracts involving property is to notify the police once the damage is done. If you haven’t filed a police report, or have the report handy for the insurance company, then your carrier can consider you breaching their contract, and will withhold the benefits you need to get your home or business up and running again.
Once you have all these checked off your list, you should have a well-rounded idea of what your policy will cover and how to keep it. Important details from the contract should be noted separately or highlighted on your copy(like premiums and exclusions) so that you can easily reference them later.
As always, EZ.Insure is around to assist with your insurance needs. Your agent will answer any questions you have, compare different plans for you, and even sign you up when you’re ready, free of charge and without having to worry about being hounded by endless calls. To get started simply enter your zip code in the bar above, or you can speak to an agent by emailing replies@ez.insure, or calling 888-350-1890. EZ.Insure makes the entire process easy, and quick.