An insurance policy is a legal contract between the policyholder and the insurance company that outlines the terms and conditions of the coverage being provided. The five key parts of an insurance policy are:
- Declarations Page: This page contains information about the policyholder, such as name, address, and contact information, as well as details about the insured property or person, such as the make and model of a car or the age and health status of a person.
- Insuring Agreement: This section outlines the specific coverage being provided by the insurance company, including the types of risks or losses that are covered and the limits of coverage.
- Conditions: These are the requirements and limitations that both the policyholder and the insurance company must follow in order for the policy to remain in effect. Examples of conditions may include premium payment requirements, reporting requirements for claims, and requirements for the insured to take certain actions to prevent losses.
- Exclusions: These are specific situations or events that are not covered by the insurance policy. For example, a homeowners insurance policy may exclude coverage for damage caused by floods or earthquakes.
- Endorsements: These are optional additions to the insurance policy that modify or add to the coverage provided in the policy. Endorsements may be added at the time the policy is purchased or during the policy term, and may be used to add additional coverage, increase coverage limits, or modify existing coverage.