In insurance, often the insurance policy is actually a contract between the policyholder and the insurance company, which describe the specific claims that the insurance company is legally obligated to cover. In return for an initial fee, called the premium, the insurance company promises to cover the loss incurred by covered items. In case of damage or destruction, it pays to replace or repair the items. If the insured party is a person, then the insurance policy will be available to him or her. However, in case the insured party is not a human, but a machine, then the insurance policy will be applicable only to the machine.
It is important to note that there are some standard policy definitions that apply to most insurance policies. One of these is that damage and destruction are the coverage that is designed to repair or replace the items at no extra cost. The policy may also include the loss of the items due to fire, flood, theft and malicious mischief. Other types of coverage may also be listed in the standard policy definitions.
Another set of insurance policy definitions concerns the insured party. In the insurance policy, there are two parties that can be insured, namely the insured entity or its authorized agents. There are also several policy limits that define the maximum compensation payable to the insured party. This policy limits specify the amount that the insured party will be entitled to receive in the event of a claim. Most often, these limits are expressed as a percentage of the total market value of the damaged or destroyed items, as expressed in the contract.
Insurance policy definitions also include definitions that refer to the declarations page that accompanies the insurance policy. The declarations page is a separate document from the contract itself and serves as the supplement to the contract. It contains definitions that cover specific items and exclusions that are specific to particular situations. For example, a coverage exclusion may specify that if an insured product has been placed in a position that exposes it to water for a certain amount of time, then it becomes a covered item. The declarations page is usually located after the contract, after the “assesured or secured” portion of the agreement. It is advisable for consumers to refer to the declarations page to get a clear understanding of the complete coverage and exclusion sections of the insurance policy.
Another set of insurance policy definitions involves the perils of an event. Common perils are usually contained in the enumerated items in the declarations page of an insurance policy. These perils usually include acts of violence or destruction of an item. Examples of perils may include acts of terrorism and vandalism. In addition, there are also a number of exclusions that appear in most insurance policies. Most often, these exclusions are expressed in terms of the nature of the risks associated with a particular activity or location. Learn more information about Sign Installation and Repair Insurance
Generally, the language of an insurance policy often leaves some wiggle room for interpretation. This is why it is important to discuss any and all concerns that might arise with your agent or broker. Your agent will likely be more knowledgeable about what types of exclusions and coverage appear in any particular insurance policy than you will. It is also highly recommended that anyone purchasing insurance policy coverage should carefully read and understand the declarations page. By doing so, you will not only be safeguarding your investment, but you will also be meeting the requirements of your state insurance department.