An insurance policy specifically describes the coverage it provides. Since no insurance policy can cover every contingency, the policy must describe its limitations, restrictions, and exclusions as clearly as possible. The best way to determine the coverages provided by a particular policy is to examine its provisions, which are generally included in the following sections of the policy: -
· Declarations
· Definitions
· Insuring Agreements
· Exclusions
· Conditions
· Miscellaneous provisions
Declarations
The declaration page (also simply called declarations or dec) of an insurance policy is an information page that provide specific details about the insured and the subject matter of the insurance, such as
· Name and location of the Insurer
· Name and address of the insured
· Policy Number
· Policy Period
· Description of covered property or locations
· Schedule of coverages and limits
· Deductibles
· Premium(s)
· Policy forms
· List of endorsements, if any
· Agent’s name
· Other important details
Definition
Since insurance policy contains technical terms or words that are used for specific purpose. Most policies define these terms that have specific meanings with regard to the coverages provided.
Insuring Agreements
An Insurance agreement in an insurance policy is a statement that the insurer will under certain circumstances, make a payment or provide service.
Exclusions
Exclusions are policy provisions that eliminate coverage for specified exposures.
Reasons for Exclusions
· To avoid covering uninsurable losses.
· To avoid insuring losses that could be prevented.
· To eliminate duplicate coverage.
· To eliminate coverage that most insured do not need.
· To eliminate coverage for exposures that requires special handling by the insurer.
· To keep premium reasonable.
Conditions
Insurance policy contains several conditions relating to the coverage provided. The insured must generally comply with these conditions if coverage is to apply to a loss.
Miscellaneous Provisions
Insurance policies often contain provisions that do not qualify as one of the policy components. These miscellaneous provisions sometimes deal with the relationship between the insured and the insurer, or they might help to establish procedures for carrying on the terms of the contract.
Insurance Contracts, Loss Exposures and Risk Management
