As reading materials go insurance policies will probably never make it onto the top of the reading list for most us. Apart from being long the language of policies make them sound like mumbo-jumbo to all but lawyers and people working in the insurance industry. While a policy document may not be fascinating reading it is important reading. It is essential that you read and most importantly understand what your policy says because it has important implications for whether or not the insurance you bought does what you expect it to do for you.
With that in mind here are six good reasons to read your policy documents:
1. Your policy contains important dates
Insurance policies can be time sensitive. Often they contain dates by which something must be done. For instance there is a section that mentions the time-frame within which you have to file a claim after an accident. This ensures a timely and efficient claims process. If you don’t read your policy and are not even aware of such a timeline the chances of your claim being rejected are quite high.
2. Underneath all that jargon is important stuff
What with all the legal language and insurance jargon policy documents can be quite confusing. But that’s no reason to toss yours aside or discount it as unimportant. The jargon is there for a reason and these words are important when it comes to your coverage. In fact the very factor that determines whether or not you will receive a payout could be the presence or absence of certain words or phrases.
To make things easier first go through the ‘Definitions’ section which explains all the terms used. Referring to this section when reading the policy document will help you make sense of what you’re reading. Some of it might still seem incomprehensible. This is why you have an insurance broker. Make sure you contact them to explain things to you.
3. Your policy tells you what you’re covered for
Reading and understanding your policy will let you know what you’re covered for. On this point pay particular attention to the “Exclusions” clauses. Exclusions are those instances events and/or items for which the insurance company does not provide coverage. In other words these clauses tell you about the limits of your coverage and what you cannot make a claim for.
4. Your policy contains your policy limits
One of the most important aspects of your policy documents is your policy limits. We go into a more in depth explanation of them here but in short they are the maximum amount of money you will be paid in the event of a claim. There are often numerous limits applied to different parts of your policy like a limit on additional living expenses content replacement and liability. You’ll also have to pay your deductible first – another thing discussed in your policy documents.
5. Your policy sets out important conditions
This is the section that tells you what the insurer’s responsibilities are and what your responsibilities are as the customer. Here the insurer sets out certain requirements or conditions for the insured such as the payment of premiums or an expectation that the insured property would be maintained in a certain condition etc. It would also include procedures to follow after a loss. If the policy conditions are not met the insurer can reject any claim you make under the policy. Don’t take that risk. Read your policy and know what’s required of you.
6. Reading your policy helps you stay on top of modifications
The ‘Endorsement’ section in your policy offers you options to add coverage or increase coverage limits. Insurers can also issue special endorsements which expand or limit the coverage. Whatever is done under the endorsements section of your policy becomes part of your policy and is in fact part of the contract between you and the insurer. It’s important that you keep track of any changes made under the endorsement so you are not caught by surprise.
Remember you can always talk to your broker about any questions you might have about your policy.