Congratulations! You’ve worked with your local independent insurance agent and now have your insurance policy. Or maybe you’ve had your policy for a while but haven’t taken the time to become familiar with it.
We get it — reading your insurance policy is probably not high on your to-do list… or your want-to-do list. However, getting a basic understanding can help you make sense of your coverage, what’s included and how your insurance works – which is especially important to know when the time comes to make a claim.
Here’s a quick guide to help you start to understand your insurance policy. Then, if you have any questions about your specific policy, you can contact your independent agent who will go over all the details.
The Declaration Page is the first page or pages of your insurance policy and summarizes important information about your policy, including:
Your personal information
Who is insured
A description of what’s insured
Details of your coverage
It’s also important to take note of the policy’s effective date and when your policy expires. Policies are typically 12 months in length but can also vary.
When you make changes to your policy, you’ll receive an updated Declarations Page so you’re always current on your coverage details. You’ll also be sent a new Declarations Page every time you renew your policy.
This is a more detailed view of what’s included in your policy and eligible for a claim. This section will detail when and how your coverage applies and the deductibles and limits of your policy. A deductible is how much you’re required to pay out-of-pocket during a claim. Limits are the terms or limitations, if any, that apply to your insurance coverage.
In a named perils policy, each specific peril you are protected against is outlined, for example, Theft and Fire. While an all-risks policy covers risks except those that are specifically excluded. You can see what kind of loss is not covered in an all-risks policy in the Exclusions section.
This section helps a policyholder understand what is not covered under their policy. This includes any loss not included in an all-risks policy. Your type of coverage, state you live in and insurance carrier will all affect the exclusions in your policy.
What kind of exclusions are in a policy? Common exclusions listed on a homeowners policy, for example, include losses from war, acts of terrorism and neglect.
This section outlines the conditions the policyholder must meet for a claim to be paid. You can think of it as the responsibilities you have to uphold the agreement. This includes timely reporting of claims, payment plans, taking practical steps to ensure no additional damage after a loss and the insurance company’s cancellation policy.
Your insurance should fit the needs of your lifestyle. Endorsements, or riders as they’re also called, can be added to customize your insurance policy. They can also be used to tailor your coverage in response to life changes between policy renewals. Notify your independent agent of any changes that could create a need for an endorsement. For example, the sale of your car, purchase of a new vehicle, an engagement ring or a basement renovation.
Not sure if you need to update your insurance? View our helpful guide here to see if you have outdated insurance.
You may notice some bolded words or terms when reading your insurance policy. The specific meaning of these key terms is defined in the Definitions section of your policy. Use this section if you have questions about the meaning of one of the highlighted terms or how it’s defined by your coverage.
Let your agent be your guide
Lastly, like any legal document, some terms and words may be unfamiliar to you or confusing at first glance. But fear not! Your local independent agent can help you understand the coverage in your policy. That’s one of the many perks of having a local expert on your side.
This article is for informational and suggestion purposes only. If insurance policy coverage descriptions in this article conflict with the language in the policy, the language in the policy applies. Talk with your independent Grange agent if you have questions regarding the details of your insurance policy or if you need to update your insurance.
-Nonprofit Risk Management Center