Anatomy of An Insurance Policy

Burman, Critton, Luttier and Coleman LLP Blog

01/20/2010 - Permalink

By: Adelqui J. Benavente
Paralegal/Investigator

When a person buys insurance coverage, seldom do they take the time to thoroughly review the language within the policy including the important "definition section".

Over the years, multiple lawsuits have been filed based upon discrepancies or misunderstandings between an insurance company and its insured. From a lay person's standpoint, policies of insurance seem to be quite complex, hard to follow, and filled with convoluted language.

Insurance Companies for the most part, try to extend coverage when deemed to be appropriate. Unfortunately, when an insurance company denies coverage, it is important for the insured to understand the separate parts of the insurance policy puzzle.

The following five definitions will help you to more easily navigate your insurance policy:

1. Insuring Agreement: The insuring agreement explains in detail the type of coverage provided by the insurance company to its insured. Insuring agreements can provide a wide range of coverage and may be quite broad or specific, depending on the policy. Upon purchasing and obtaining insurance coverage, for any reason, the insured should very closely review and scrutinize the insuring agreement to determine exactly what the policy insures.
    
2. Declaration: This portion of the policy contains the specific coverage information, the name of the insured, dates the policy will be in effect, specific coverages and the amounts charged for premiums by the carrier. Generally, this declaration also contains endorsements or addendums for coverages.
    
3. Conditions: Once the insured reviews and understands the declaration page, to confirm what coverage they have purchased, the insured should go through the policy, with a fine tooth comb to ensure that the policy covers all relevant occurrences and perils. Specific attention should be given to exclusions and "non-covered" perils, which is the portion of the policy the insurance company utilizes to deny coverage. Particularly there are very standard conditions within every insurance policy which include: a requirement of the insured to comply with their responsibilities, including timely filing of new claims, notification of lawsuits against them, and generally cooperating with the insurance company during a claims process. This portion of the policy also contains provisions which discuss how an insured may institute a lawsuit against the insurance company.
    
4. Definitions: All insurance contracts contain definitions throughout the policy. These definitions are critical in determining whether coverage will be provided or denied. It is very important to understand the words within the insurance policy and how they relate to any particular situation. Upon receiving the insurance policy, it is vital to understand these definitions. If an insured has any doubt as to the definitions or the interpretation of particular words, they should immediately consult with their insurance agent to confirm they have received their desired insurance protection.
    
5. Exclusions: In the body of an insurance contract there are always exclusions. These exclusions detail occurrences and perils not covered by the insurance company. It is very important for the insured to understand these exclusions, to make sure they do not find themselves in a situation where coverage will not be afforded, through no fault of their own.

These basic definitions are intended to allow you to better understand an insurance policy and why it is written in a particular fashion.

If you believe that your insurance company has not treated you in good faith, please immediately contact the lawyers at Burman, Critton, Luttier and Coleman. We are your trusted advocates in the state of Florida and can help you with all of your legal needs.

Please contact us at (561) 842-2820.