Wednesday, June 11, 2008

Reading an insurance policy: The first step

An insurance policy consists of several sections, and to understand what coverage you have purchased you need to understand what each section means.

The "coverage selection page," also called the "declarations page" or "dec page" is created for you personally when you purchase or renew your insurance. It indicates how much insurance you have bought ("the limits," discussed in a previous post) and any other information unique to the policy your policy. For example, the dec page of an auto policy will indicate what cars are included in the policy. A Commercial General Liability policy will indicate what premises are covered in the premises liability portion of the policy. A dec page may also indicate the names of the people or businesses that are covered under the policy.

Each and every time that you purchase or renew insurance, you should review the dec page to make sure that the insurer has issued to you the policy that you meant to purchase. In an auto policy it is not unknown for an insurance agent to raise your insurance limits (and your premiums) without discussing that with you. If your policy renews automatically, it is a good time to consider if the limits you chose still meet your needs.

In future posts I will discuss other parts of an insurance policy, beginning with the "insuring agreement."

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