How to read your insurance policy

An insurance policy is a contract that defines the obligations of both the insured (you the customer) and the insurer (your insurance company). Insurance policies sometimes contain terms that are hard to understand, and policies may be written in a confusing manner. Taking the time to understand your policies is well worth the effort. Besides providing coverage, policies also assign certain responsibilities to you, the insured person. Failure to meet these obligations may impair the coverage you rely on for protection.

Every insurance policy has five parts: declarations, insuring agreements, definitions, exclusions, and conditions. Many policies contain a sixth part: endorsements.

General guidelines for reviewing your insurance policy:

Familiarize yourself with the structure:
Your policy should have a cover page or declaration page (this contains basic information like your name, address, policy dates, insurance company contact information, and key details of your policy), a list of terms or definitions found in the policy, coverage details, endorsements, and exclusions.

Check the accuracy of all the information:
Names (including correct spelling), contact information, the duration of the policy, coverage, and premiums. Check the information against your policy application to ensure all information is captured accurately. Remember that misleading or mistaken information may invalidate your policy.

Review the eligibility requirements and exclusions:
Check the eligibility requirements to make sure you are clear about what you are covered for and what your obligations are in the event of a claim. If you requested certain endorsements, make sure they are represented correctly. Be aware of any exclusions in your policy, there are certain risks and conditions that your insurance company will not cover.

Understand the different types of coverage and the terminology:
Your policy should have a list of definitions written in plain language that you can understand. If not reach out to either the insurance agent or broker you garnered the insurance from or to the insurance company.

Review your rights and privileges:
As a consumer you have certain rights and responsibilities regarding your policy and coverage. Make sure you are clear on what is required of you should you need to make a claim on your policy. In each province there is also legislation, an Insurance Act, that outlines formally all the facets of the contract of insurance and the rights of both the insured (you the consumer) and the insurance company.

Insurance Acts by province or territory:
Alberta
British Columbia
Manitoba
New Brunswick
Newfoundland and Labrador
Northwest Territories
Nova Scotia
Nunavut
Ontario
Prince Edward Island
Quebec
Saskatchewan
Yukon

Review the claims procedures and settlement options:
Be aware of how to report a claim and what information is required for the insurer to handle and process your claim. Most insurance policies will include a section about Basis of Claims Settlement, which should provide insight into the claims process.

Ask questions:
If you see anything that you don’t understand, ask your insurance agent or the insurance company. If you notice anything in the policy that seems incorrect or confusing, ask questions.
Remember, it is your responsibility to make sure you understand what you are buying and that all your information is correct.

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