An insurance policy is a legal contract between the insurance company (the insurer) and the insured person(s), company or entity (the insured). By reading your policy, you can ensure that the policy meets your needs and that you understand your responsibilities and those of the insurance company in the event of a claim.
Many insureds buy a policy without understanding what is covered, what exclusions eliminate coverage, and what conditions must be met for the coverage to apply in the event of a loss. The SCDOI reminds consumers that reading and understanding their entire policy can prevent hassles and disagreements with their insurance company in the event of a claim.
Basics Insurance Contract
An insurance contract consists of four main parts:
declaration page
insurance contract
exclusions
Terms
It is important to understand that comprehensive policies may have exclusions and conditions specific to each type of coverage, such as: It is imperative that you read the language of the specific coverage that applies to your loss.
The Declaration Page
This page is usually the first part of an insurance policy. It identifies who the insured is, what risks or assets are covered, policy limits and policy duration (i.e. how long the policy is in force).
For example, the claims page of an automobile policy contains the description of the insured vehicle (e.g., claims must be paid before an insurer pays its share of a covered claim).
The Insuring Agreement
This is a summary of the main promises of the insurance company and what is covered. In the insurance contract, the insurer agrees to do certain things, such as: B. pay damages for the risks covered, provide certain services or agree to defend the insured in a liability suit. There are two basic forms of an insurance contract:
Coverage of named perils where only perils specifically listed in the policy are covered. If the peril is not listed, you are not insured.
exclusions
All-risk coverage, which covers all claims except those specifically excluded. If damage is not excluded, it is insured. Life insurance is generally comprehensive insurance.
The Conditions
Conditions are provisions inserted into the policy that qualify or limit the insurer’s promise to pay or provide benefits. If the insurance conditions are not available, the insurer may reject the claim. The general terms of a policy include the requirement to provide the company with proof of damage, protect property after a claim, and cooperate with the company’s investigation or defense of a liability claim.
