The Insurance Policy
Once an insurance contract is agreed, a record of the agreed terms is captured in a document called a 'policy'. The policy is not the contract but only the evidence of the contract. In the event of a dispute relating to the particular policy contract, the courts will refer to the policy for clarification on the agreement or intentions of the parties.
It is often said that we are only able to realise the benefit of any insurance policy when a claim arises.It is at this point that we dust the policy document and look at it in detail.
Interpreting The Insurance Policy
The secret to interpreting the wording/content of an insurance policy and not rely solely on the interpretation of another individual is to view the document as consisting of distinguishable sections.
© InsuranceInBoldPrints
Most people are put off by a bulky policy document and in an attempt to understand the content of an insurance policy at once become even more flustered.
Each insurer has its own standard policy wording for different classes of insurance and in some cases, similarities exist between insurers' policies due to established market practices. Each new policy is personalised to the policyholder by the inclusion of details of the new customer.
Traditionally the form of policy document commonly used by insurers was the scheduled policy. In response to criticism of the 'unfriendly' wording / language adopted in these old insurance policy documents, insurers have radically changed the presentation of insurance policies.
However the basic theme remains the same and once anyone reading an insurance policy is able to discern the following main sections of an insurance policy document, comprehending same become a lot easier.
The main parts of an insurance policy are
The heading
The preamble
The operative clause
Exceptions
Conditions
The heading identifies the class of policy and all policy documents will conspicuously display this. As pointed out above insurers have made great progress in redesigning the presentation of policy documents and one such change involves expunging the preamble from most contracts.
The preamble clause is the part of the document which makes reference to the insured having paid the premium and the proposal form signed by the insured being the basis of the contract.
The use of the proposal form is fast being consigned to history as insurers now look to other more customer friendly methods of eliciting information needed to underwrite a risk.
When buying insurance, if you decide to compare quotes using comparison sites, do not be influenced solely by Price.
Once an insurance contract is agreed, a record of the agreed terms is captured in a document called a 'policy'. The policy is not the contract but only the evidence of the contract. In the event of a dispute relating to the particular policy contract, the courts will refer to the policy for clarification on the agreement or intentions of the parties.
It is often said that we are only able to realise the benefit of any insurance policy when a claim arises.It is at this point that we dust the policy document and look at it in detail.
Interpreting The Insurance Policy
The secret to interpreting the wording/content of an insurance policy and not rely solely on the interpretation of another individual is to view the document as consisting of distinguishable sections.
© InsuranceInBoldPrints
Most people are put off by a bulky policy document and in an attempt to understand the content of an insurance policy at once become even more flustered.
Each insurer has its own standard policy wording for different classes of insurance and in some cases, similarities exist between insurers' policies due to established market practices. Each new policy is personalised to the policyholder by the inclusion of details of the new customer.
Traditionally the form of policy document commonly used by insurers was the scheduled policy. In response to criticism of the 'unfriendly' wording / language adopted in these old insurance policy documents, insurers have radically changed the presentation of insurance policies.
The main parts of an insurance policy are
The heading
The preamble
The operative clause
Exceptions
Conditions
-Implied conditions
-Express Conditions [General or particular]
The policy schedule
-Express Conditions [General or particular]
The policy schedule
The heading identifies the class of policy and all policy documents will conspicuously display this. As pointed out above insurers have made great progress in redesigning the presentation of policy documents and one such change involves expunging the preamble from most contracts.
The preamble clause is the part of the document which makes reference to the insured having paid the premium and the proposal form signed by the insured being the basis of the contract.
With the growing popularity of payment of premium by instalments, the first part of the preamble clause has somewhat also become inconsequential.
The operative clause is the section of the policy which details the type of event insured against. As well as ensuring that the event(s) mentioned under the operative clause includes those originally contemplated by the parties, the insured or his representative must also make certain that they fully comprehend the policy exclusions/exceptions. © InsuranceInBoldPrints
Exclusions /Exceptions of a policy detail the instances in which the policy will not operate. Some of these exceptions are particular to the type of the policy being insured while others apply to almost all policies. Every section of the policy document is important but it is vital that as the insured you familiarise yourself with the excepted risks and the policy conditions.
Finally the Schedule of the policy which records the details of the particular contract. Most insurers have pre-printed policy documents for every class and use the schedule to personalise the policy to individual customers noting any agreed revisions to the standard document.When buying insurance, if you decide to compare quotes using comparison sites, do not be influenced solely by Price.
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