As a homeowner, you want to protect your investment, and home insurance was designed to do just that. Your coverage protects you against the risks you face every day.
There’s just one problem:
Your policy looks like it belongs on a shelf next to the dictionary. It’s long. It’s boring. It’s wordy.
Despite all of this, it’s extremely important that you understand your home insurance policy. And that means reading your policy carefully. Thing is, your policy is an important legal document that defines the agreement between the insurance company and you (the insured.) There are a ton of important details about your coverage, your obligations, and exclusions packed into that paperweight. And those details could mean the difference between something being covered…and something not being covered.
At any rate, to help you understand how your policy is broken down, we’ve laid it out section by section below.
1. First of all, we present your Declarations Page:
The declarations page (a.k.a. the dec page) is the first portion of your policy. Its job is to give you an overview of what the policy is and what it covers. The dec page tells you:
- Who’s being insured
- What the policy protects you from
- The property that’s insured
- The dates that the policy is effective
Pro tip: Your auto policy also has a dec page that functions in much the same way.
2. Continuing on, behold: your Insuring Agreement.
Now we get into the good stuff.
The insuring agreement explains what the insurance company will do if you have a loss and end up filing a home insurance claim. This section will also lay out what’s covered by your policy. When you paid for your insurance and finalized everything, the insurer agreed to specific things – for example, paying for covered losses or providing legal defense for liability lawsuits.
You can have one of two different types of insuring agreements: named-perils and all-risk.
Named-perils coverage will only protect you from losses that are specifically written out in the policy.
All-risk coverage will protect you from all losses except for those that are excluded by the policy. (Many life insurance policies are written out like this.)
3. Well, there had to be a catch somewhere – here comes the exclusions section.
This is a really important part of your policy. Exclusions are losses that just aren’t covered by your insurance. What that means is if you ever experience one of these losses, your insurance company will not take care of the expenses.
You can see why you need to really understand this section – you don’t want to have a loss only to find out that it’s excluded. (Flooding is a common insurance exclusion – but there are many home insurance exclusions you should know about.)
But don’t worry: we’ll explain how you can add coverages to your policy in a second.
4. So, moving onto the conditions section.
Okay. This is another section that you need to pay attention to. The conditions section lays out situations in which the insurance company may not have to pay out a claim when you file one. The conditions mostly have to do with things that you as the homeowner have to do. The insurance company may not have to pay out a claim if the conditions of the policy have not been met.
For example, you might be required to file proof of loss with the insurance company within a certain amount of time. If you fail to do that, the insurance company may not accept the claim. To make sure that you’re meeting all the requirements of your home insurance policy, take some time to read through the conditions section. Ask any questions you have about them so that you understand your responsibilities as the homeowner.
5. Definitions, definitions, definitions.
This section could be on its own, but it could also be hiding in another section. This section exists to help you understand all the fancy words in your policy – how helpful! Insurance vocabulary isn’t always the most intuitive or the clearest, which is why your policy may have this handy-dandy section.
6. And for the grand finale, we have the endorsements and riders section.
An endorsement is basically an addition to your policy. It can add coverage, take away coverage, or change coverage. This is how you can add various coverages that are otherwise excluded. For example, if sewer backup is excluded, you can add an endorsement to make sure it’s covered. You can also add coverage for jewelry or other valuables here.
Something to keep in mind:
Every year when the insurance company renews your insurance, the coverage or language might be slightly different. So, be sure to review this section carefully to make sure you have all of the coverages you need.
Okay, that was a lot of information! The above is just a general outline of the sections included in your policy. Yes, there are many, many words included in your policy, and it’s not the most riveting read. But it’s still an important thing to do.
If you have to save money on your home insurance, we would be happy to help you with that. Our agents can help you shop for your insurance so that you can make sure you’re getting the best coverage at the best possible rate. All you have to do to get home insurance quotes is fill out our online form or give us a call today.