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Why Is It Important To Understand Your Insurance Policy?

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Curling up with a good book on a weekend, does the idea fascinate you? Don’t you think you should read something else before that? Yes folks, you should be reading your insurance policy, the various covers and exclusions associated with it for understanding insurance and the need of insurance.

What is insurance?

An insurance policy is a legally binding contract between your insurance company and you. A contract is basically the terms and conditions of an insurance policy which are mutually agreed upon by the insurer and insured.

Points To Be Considered While Reading Your Insurance Policy:

1. Policy Declarations

The insurance policy declaration page is the first and a very important page of the policy. Insured’s details and the coverage and the time period for the cover are specified on it.

2.Insurance Definitions

This section shells out definitions of all the words and phrases present in the insurance policy. This enables the insured to understand the terms he is unaware of. For example: If you need to understand ‘Deductibles’, you can simply look through this section to understand it.

3. Insurance Policy Coverage

This section gives you a list of things which are covered under a  policy. It also provides some additional benefits for the insured. For example, a particular car insurance policy will provide you with personal liability along with some add on covers like 24×7 spot assistance, engine protector etc. making the customer feel valued and secured.

4. Insurance Policy Exclusions

Policy exclusions include a list of things which are not covered in the insurance policy. However, some of the exclusions can be covered by the insurer on paying extra premium. For example, flood coverage maybe excluded for people living in an area where floods are unlikely to happen. However, if the insured wishes to have an additional flood cover, he can opt for it by paying extra.

5. Insurance Conditions

This part highlights the responsibilities of both the insured and the insurer. Pointers like cancellations of policies, subrogation and payment plans are highlighted.

6. Duties After a Loss

This part guides the insured in case of a loss. It includes responsibilities like informing the insurer as soon as possible in case of a loss, notifying the police whenever required and protecting yourself and your property from potential losses.

It is very important to read through and understand your insurance policy and it is equally important to buy it from a trusted insurance company. For more information on best insurance policies, visit our website!

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Published on:13 May, 2016

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