Transcript

An insurance policy is a legal contract between an insured, which would be yourself, and a legal entity, which is your insurance carrier. It is important to understand your insurance policy to find out what your responsibilities are in the event of a loss. It's also important to know what is covered and not covered. And also you want to make sure that the policy does meet your personal and actual needs.

Understanding what you're purchasing is very important. Read through the fine print because there's all different types of insurance policies and not knowing the type of product that you have could potentially leave you with holes when you need the insurance the most.

The declarations page of an insurance policy is going to be the first thing in the policy jacket, is going to provide you with your effective dates, all your policy limits, your deductibles are on there, your term, so how long you will be under contract with the insurance carrier. For example, an auto policy declaration pages will include your time that you're gonna be with that carrier. It'll include the named insurers, your drivers listed, your year, make, and model, and VIN number of your vehicles that should be on the policy as well as your coverage limits and your deductibles.

Property damage, uninsured and underinsured motorist coverage. Also your bodily injury limits, which is your coverage if you're in an at fault accident and you injure someone. It's a great place to find the information that you need should you be in an accident or if someone has a question about your policy. That's the first place you're going to start is at the declarations page.

So the insuring agreement is the meat and potatoes of the insurance policy. It describes who's responsible for what at the time of a loss and it also names or excludes different perils that could or could not be covered.

Each party has their responsibilities to abide by the insurance agreement, which is the contract of who's responsible for what. In specific to homeowners policies, there's two types named perils or open perils. The difference between the two is the named perils are specific to what's gonna be covered. So if it's stated on the policy that it's covered, then it's covered.

And that is it, nothing else. If it's the all risk or open perils policy, everything is covered except for specific items that are listed on the insurance agreement. So it's important to review the insurance agreement to know the type of product that you're purchasing, because you could be left with holes if you don't know that you're purchasing a named peril versus a open perils policy when there's a claim that needs to be paid you file the claim and the claim is denied. So that's why it's important to know your coverages and understand the insurance agreement because ultimately it is a contract that you're signing between yourself and the insurance carrier.

The next part of your insurance policy is going to be the exclusions.

The exclusion part of the policy is important to know and understand because each policy depending on the product that it is, there are gonna be exclusions.

So most policies are gonna be considered open peril unless the peril is excluded. Examples of things that would be excluded in the homeowners policy would be flood insurance.

That is something that would have to be purchased separate.

Examples of things that will be excluded in your auto policy would be your pets and just general wear and tear. The next part of the insurance policy are the conditions stating that you as the insured are responsible to do certain things to really actually end up with a payout at the end of your loss, such as calling in the claim as soon as it occurs and also mitigating for any further damages. It is important to read the definition section because that is where they will provide actual meanings for different terms inside of the insurance policy.

The definition sections help you identify what a named insured is, what a third party is, the carrier.

The definitions in an insurance policy are just strictly stating what each item means, like what is apparel, what is covered, what's not covered, what's excluded.

So it just kinda helps you identify the terminology within the contract because it's mainly a lot of legal jargon, so that kinda helps you understand what they're talking about and who's identified.

The final section of the insurance policy are going to be your endorsements and riders, which basically is going to be adding, changing, or modifying your coverage either during the policy period or at your renewal.

The named insured has the opportunity to endorse the policy, make any modifications to it, but also the carrier has the option to endorse the policy at the renewal time. So it's important to review the renewal, compare it to the prior years or the current terms. You'll use the declarations page, of the renewal and of your current term to review if there's been any changes on the carriers end because that that does occur, from time to time.