An insurance policy is nothing more than a contract between you, the policyholder, and the insurance company. Because the insurer develops the policy verbiage and structure, insurance contracts are considered “contracts of adhesion“. This means the policyholder has almost no ability to modify the language of the contract. It does not mean, however, that you should avoid reading the policy and asking your agent or insurance company questions about the various terms, conditions, and exclusions.
First, reviewing the policy coverage will ensure the policy was issued with the coverage you intended to purchase and provide an opportunity to correct an error before a loss occurs. Second, reading the policy will help you to understand better the details of the coverage you have purchased, including applicable exclusions.
We understand that insurance policies are boring to read and can appear complicated and confusing. They are not intended to be that way and insurance companies have made a tremendous effort to standardize and simplify insurance contracts. Most insurance policies are written in “plain language” and try, as much as possible, to avoid legalese. Any potentially complicated terminology in the policy that needs to be further explained will be in quotes and then defined in a specific part of the policy.
To help you make more sense of your policy, it might help to understand how most insurance contracts are structured:
- Declarations Page: think of this as a basic summary of the coverage and limits. You will find your name, the policy period, covered locations (if applicable) and a detailed listing the coverage afforded and associated limits and deductibles.
- Insuring Agreement: this is the “meat” of the insurance policy that details what the insurance company will do in exchange for the premium you have paid. This describes who is covered, what is covered, where they are covered and how they are covered. The insuring agreement also lists any exclusions or restrictions to coverage.
- Policy Conditions: this sections lists your responsibilities in the event of a claim, and also any changes to coverage required by State law, such as cancellation provisions.
We recommend, while reading your policy, that you write down any questions you have about coverage and terminology. Call your agent at Safeguard Insurance, or your current insurance provider, to discuss your questions with him or her. Do not be afraid to ask questions! We would much rather you understand exactly what coverage you have purchased before a loss, rather than deal with an unhappy customer later.
At Safeguard Insurance we want our customers to be educated and understand the coverage provided by the insurance they purchase. When it comes time to make a claim we want your experience to be completely satisfactory, and that starts with you reading and understanding your insurance policies.