Insurance industry depends on Insurance documents and processes to function properly. Understanding these documents and processes is very vital especially when you are applying for an insurance claim.
Reading your insurance document requires you to go through the document and highlight the vital points. Write down the points in bullet form so that you can easily understand and review them whenever necessary. Understanding your documents may require extra steps, including finding a legal advisor or an expert.
Sometimes, insurance policies are hard to understand, i.e., insurance forms and endorsements, mainly because they are legal documents written and prepared by legal-minded people. These documents are lengthy. As a client, you can feel overwhelmed in creating time to read all the written content and feel that the documents are Too Long To Read, TLTR. Even if you read, you fail to understand the legal interactions within the document.
Table of Contents
Why Do You Need to Understand Your Insurance Documents?
Reading your insurance documents will help you understand your insurance cover and the financial implications. It will also help to verify that your chosen insurance policy meets your needs and you can understand the responsibilities of you, the insured, and your insurer in case of loss. Because insurance policies are complicated, hence, insurance companies can deny claims, and a follow-up on the same can double the cost.
Since insurance documents are prepared and written by legal-minded people. There is always a need to engaged an expert (preferably an Insurance Lawyer) to break down the document into a language you can easily understand. It’s essential to read and understand your insurance contract carefully before signing so you know what you agree to. Reading the agreement will also help you identify any contract errors affecting your coverage or costs.
How will you read and understand the policy?
Carefully Reading Through The Policy
Take time to skim through the articles and familiarize yourself with the basics of the policy. There are essential things to check out that are vital to your coverage, especially when making a claim. They include declarations, insuring agreements, definitions, exclusions, and conditions.
The Declaration
The declaration, or the declaration page, is mostly the first page of the insurance policy that summarizes the facts about the insured, the coverage, and the description of the item insured.
The Insurance Agreement
The Insurance Agreement is another part of the policy document contained in the insurance coverage from which the policy is constructed. It states the premium the insured promises to pay and, in return, the amount the insurer promises to pay on behalf of the insured.
The exclusions
The exclusions are the things excluded from your policy coverage that your insurer doesn’t cover.
The policy has specific requirements from the insurer that may state that the insurer won’t cover all the losses, known as conditions. Therefore, you should review it to understand the conditions that need to be followed.
You must also look out for and understand the following minor things in your policy: They may be found within the declarations, insurance agreements, or exclusions.
The Policy number of your insurance
The policy number of your insurance is necessary when you need to make changes to your policy and report claims.
The Effective and expiry dates of your covers
The effective and expiry dates of your covers states the date when your insurance coverage began and when it will end or expire.
The person being Insured and the Contact Address
The person being Insured and the contact address takes into account whom the insurance covers and the contact address.
Business description and locations
Brief notes about your business and the location of your operations are required. This also helps cover special items you may have, like electronics or any valuable items you may own.
Additional Person Covered by the Insurance
Your insurance covers beneficiaries or co-owners. It can be in business or property you both own. They have the same rights to the policy as you do.
The Premium
The Premium is the amount paid for the insurance.
What the Insurance Covers?
The insurance covers the item insured, which can be your house, business, or any given property you own.
The Insurance Company
This is the insurer, or whom the policy belongs to, the underwriter.
Endorsements
Endorsements are changes to the insurance policy that can be added, deleted, or excluded. For instance, endorsements are offered in the case of floods or earthquakes.
Coverage Limit
Coverage Limit is the amount your insurer will pay that is covered in the policy. Anything beyond that, for example, if you unintentionally cause harm to others, it will be your responsibility to pay for the damage caused.
Collapse it into Manageable Portions and Make Notes
As you read through the policy, highlight and write down the vital points, especially the one stated above. This will help you break down your policy into small, manageable portions. You can write them in bullet points. Take time to go through the policy carefully to understand the terms fully, what you’re covered for, what you’re not covered for, and what you’ll pay. Taking notes will help you to review the policy whenever necessary.
Seek Expert Advice
You can read and still fail to understand the policy. The documents are legal documents prepared by lawyers whose language is full of jargon and ambiguous words that you can’t easily understand. You can call for an expert, and it can be a lawyer or an agent. An expert will help you break down the words into a language you can easily understand and guide you in accepting the policy.
Types of Insurance Documents
There are different types of insurance document, all of them works together to make the insurance process easier. These Include:
- Insurance quote template (what it will cost you to be insured)
- Insurance policy template (what the insurance covers)
- Insurance letters
- Certificate of insurance
- Insurance claims documents
- Insurance loss and adjustment documents
Final Thoughts
Insurance documents are essential, especially when making a claim. You can find them too long to read because they are lengthy and tedious to read through. Reading and understanding your insurance policy helps you know what you’re covered for, what you’re not covered for, and what you’ll pay.
To easily understand the insurance policy, read through it as you highlight the vital points and write them down in small, manageable portions. Writing them down, especially in bullet points, is essential for later reviewing the terms. If you still fail to understand the insurance documents fully, seek expert advice from professionals in the field.