How To Read ANY Insurance Policy

How To Read ANY Insurance Policy

You might not even remember the last time when you read your insurance policy copy from start to end. Reading the technical policy terms is a tasking

You might not even remember the last time when you read your insurance policy copy from start to end. Reading the technical policy terms is a tasking job, more so when you don’t have any knowledge on insurance. Reading out the policy copy word by word is not possible even for the hardcore insurance enthusiasts.

Every insurance policy documents has several sections. It gives an idea about the amount of sum insured you have, the period of coverage, dependents in your policy, terms and conditions and exclusions. If you closely look into the policy conditions, you might also know why your certain claim is repudiated by the insurer. However going through the heavy policy wordings for a commercial liability insurance or even a personal or medical policy is tricky. There is no answer why you would not want to read the insurance document, you simply don’t want to!

To quickly understand what your policy has and what is your coverage, you can have few points in your mind handy. This can help you to bifurcate the necessary and unnecessary information in the document.

Here are the ultimate rules of reading any type of insurance policy.

  • Check for the correctness of the policy by searching for the name of the insured, auto insured, additionally listed insured and additionally endorsed insured names. If these names are not there, there is no reason of reading the document further.
  • Look for any endorsements passed. If there is any endorsement, check for the wordings of the same carefully.
  • Read the insuring agreement clauses very carefully and make sure that the required coverage is encrypted.
  • Read the list of the covered perils which is present amidst the first few pages of the policy documents. Moving over, read the exclusions carefully and make sure that you read it twice in order to avoid ambiguity during the times of claim.
  • Pay attention to phrases that are written in bold or underlined to grab your special attention.
  • If they write about referring to another section, read the section and try to bridge the gap between the two sections.
  • Read between the sentences and relate the policy wordings with what you want. Lack of understanding of the policy document might end you up in denial of claims.
  • Confirm the limit of coverage is enough for the loss you are covering.
  • Check for the annexure section if you are opting for a tailor made policy. Several clauses might be deleted to make the coverage broader.

Insurance policy document has clear definitions of different terms. It is important to know the technical meaning of such terms rather than just knowing the literal meaning of it. For example, in a medical insurance policy, they might explain you what a hospital is. We all know what a hospital is. But for some policies, an entity can be termed as a hospital if it has 20 in-patient beds, 24×7 round the clock medical services, hospital listed under certain Act of Law etc.

Keep the following points in mind before reading any insurance policy and make sure you don’t miss out the key points of your insurance.