Basics of an Insurance Contract

• 1). Locate the declaration page of the policy. Examine the information in this section as it will provide information regarding the type of coverage that you have, length of coverage, who and what is insured, the deductible and how much the policy will pay out if there is a claim filed.
  
  Depending on the type of policy, the information in this section will vary.
  
  
• 2). Go to the insuring agreement page. This section will give a detailed description of what the insurance company will do for you if there is a claim. It will touch on areas such as paying for losses as a result of certain perils or representation in the event of a lawsuit.
  
  There are two forms of an insurance agreement. One form names the specific coverage, which only insures items listed in the coverage. The other type of coverage is risk coverage, which covers all losses apart from specific exclusions.
  
  
• 3). Read the exclusions section. Here you will find what the policy does not cover. If the insurance is for the purpose of accidental death, the policy will not cover death by suicide, for example.
  
  
• 4). Study the conditions section. This section is important when you need to file a claim. It will give you a detailed description of what the policyholder must do in order to follow the policy's terms and conditions.
  
  For an auto insurance policy, this section will give you information on how to file a claim after an accident. It will also mention the length of time in which you have to file a claim after an accident has occurred.
  
  You will find information about when your payments are due and how you will make them, whether it is via check or by direct deposit. This section will also specify the consequences of not following the rules of the policy.
  
  
• 5). Read the endorsement section. You will find information regarding the insurance company's right to make changes to your policy at anytime during the length of your contract. It will also inform you of how the insurance company will make you aware of any changes. These changes can range from an increase in payment or a change in policy conditions.