Why you need to read your policy document?

You
may not find it as interesting as the best selling novels but the
policy paper is an absolutely important document as it helps you to
understand your policy better. As it says-‘if you don’t know your
rights, you don’t have any’, the same holds good for the insurance
policy as well. Your knowledge regarding the coverages will determine
the fate of your claims in future.

The insurance policy is a legal agreement between the
insured and the insurer, where the insured promises to make regular
contributions towards the policy and in-return obtains the words of the
insurer to receive compensation for the conditions listed in the policy
document. The policy deed may, therefore, contain quires of papers
explaining the ins-and-outs of the policy. Though the language may vary
depending upon the type of the policy you can find the following
standard sections in any policy document:

• Declaration
  
• Insuring agreement
  
• Definitions
  
• Policy coverages and exclusion
  
• Condition
  

Declaration:

It is like the opening speech of the policy, called the declaration
or the ‘dec’. It contains the description of the coverage and also
gives you a brief idea about the purpose of the policy. You can find
the following information in the declaration page of the policy
document;

• The name and the address of the insured (the policy holder),
  
• Duration of the coverage,
  
• General description of the items covered
  
• It also explains the coverages and declares the primary coverage limit
  

Insuring agreement:

This part is comprised of the proclamation between the insured and
insurer. It describes the promises made by the insurance company to
cover the damages caused by certain perils and compensate the policy
holder in the policy specified ways.

Definition:

The insurance policy is full of terms which are typical of the
insurance industry; hence require definitions for better understanding.
This section spells out the confusing terms and jargons. It may contain
the definitions of the terms like-insured, deductibles, co-pay and so
forth.

Policy coverage and exclusion:

The coverage part of the policy document explains the coverage
offered by the insurer. It contains detail description of the
coverages, its limits, property covered and other related matters.

Exclusions: this segment is very
important in terms of knowing the situations under which your coverage
may get suspended. Insurers announce the list of the hazards that are
not covered under their standard policy in the exclusion part of the
document.

Condition:

This section of the document contains the conditions regarding the
performance and payment of premium by the policy-holder that will keep
the policy in-effect. Violation of any of these conditions can
encourage the insurer to deny the claims in the future. It describes
the following as well:

• Method to cancel the policy
  
• Subrogation
  
• Monthly payments plans
  
• Duties of the insured after the loss
  

Endorsements:

The policy document may contain number of endorsements. This chapter
will explain the additional clauses that are inserted in the policy to
modify its benefits. Hence you should take special interest in reading
this section as they may hold the keys to alter your policy benefits
under special circumstances.

The reason to understand the policy document is
self-explanatory. Thankfully, the insurers are now using simple
language to explain the policy benefits. Hence, self-assign yourself to
read the entire policy document today to save yourself from ending up
with a ‘denied claim from’ in hand. You should also consult your
insurance agent as and when you stumble upon a ‘print’ that is
ambiguous.

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the answer to your question in this page, you can always fall back on
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