How to Read Your Insurance Policy

In the case of the majority of insurance holders, most of them do not read their insurance policies. These individuals merely scan the, often too long, insurance documents until they find the relevant section that answers a quick question.

Whether one chooses to read the entire policy or merely sections to answer a specific question, there are 12 essential “rules” to reading an insurance policy faster and with more accuracy. It is important to note that these so-called rules are not shortcuts for reading and understanding the entire document because there are no shortcuts to reading and understanding a complicated legal document.

These 12 guidelines can be found quoted from Insurance Journal:

  • Ascertain who qualifies as an insured.
  • Annotate the policy form.
  • Confirm all forms and endorsements are attached.
  • Read the Insuring Agreement first.
  • Read the exclusions.
  • Read the exceptions to the exclusions.
  • When the policy refers to another section, read that section immediately.
  • Pay attention to the conjunctions used in a list.
  • Pay attention to key words and phrases.
  • Read and understand the definitions of specifically defined terms.
  • Understand and make sure all the policy conditions have been met.
  • Confirm the coverage limits are adequate for the loss.

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