Understanding the content of an insurance policy is vital to help you know your rights and assess whether you can make a claim. In many cases, policies are filled with complex words and jargon, making them challenging to read and understand.
In our guide to insurance policies below, you’ll learn about the basics of insurance policies, including what insurance is and how it works. Additionally, you’ll learn how to read insurance policies and file a claim when the stipulated event happens.
Insurance Policy Basics
An insurance policy is a document that details the terms and conditions of a contract of insurance. In a contract of insurance, the terms require the policyholder — the person who has the insurance policy — to pay premiums to the insurance company. In return, the insurance company offers financial coverage for specific events. For example, flood insurance protects property owners when a flood occurs, allowing them to receive money to pay for damages caused by the flood.
Some common examples of insurance coverage include:
- Homeowners Insurance
- Auto insurance
- Life insurance
- Health insurance
Each kind of coverage serves a unique purpose. For example, homeowners insurance protects the policyholder’s home against perils like natural disasters, fire accidents, theft and vandalism. In contrast, auto insurance covers injuries or properties damaged in a car accident. The coverage could be for an individual or a corporate entity, or residential or commercial property.
If you experience an incident covered by your insurance policy, you make a claim to your insurance provider. The company will review your request, assess the loss or damage and determine whether to accept or deny your claim. If your insurance provider accepts your claim, one of two solutions may occur — they might pay to repair or replace the damages or reimburse you directly to cover the expenses.
How to Read Your Insurance Policy
It’s essential to read and understand an insurance agreement before signing it or making a claim. This way, you can have complete knowledge of your policy, allowing you to increase your odds of your provider accepting your claim. Below are a few tips to help you:
1. Determine the Parties Involved in a Claim
In the case of an insurance contract, the policyholder is the person qualified to make a claim, and they must make the claim to the insurance provider. When the policyholder is a corporate entity, it’s best to make a claim in the entity’s name. This differs from individual policyholders who take out insurance to protect themselves.
The policyholder may include other beneficiaries depending on the type of coverage. For example, business auto coverage may protect the policyholder and permitted drivers.
2. Make Notes on Your Contract
There may be parts of your insurance policy that make sense to you and others you must research to understand. When reading through a contract before signing it or when preparing a claim, make notes in the contract. These comments can help you highlight parts you want to ask your insurance carrier about or specify sections you want to use to support your claim.
3. Confirm All Attachments
Compare the endorsements and forms listed on the insurance contract’s declarations page to see if they correspond with the policy attachments. If you find a discrepancy, like a wrong date or an issue with the coverage duration, fix that before you sign.
4. Read the Terms and Conditions
The terms and conditions of your insurance policy contract will include essential information like:
- The type of coverage
- The scope of coverage
- The premium amount and method of payment
- The duration of the coverage
Ensure the agreement clearly states the losses or risks you want to protect yourself and your property against. If anything is missing, contact the insurer immediately. If you’ve already signed the agreement and want to make a claim, read the terms carefully to ensure your claim meets your policy’s guidelines.
Additionally, read the exclusions and note the risks outside the scope of the coverage. For example, a homeowners insurance policy may protect the property against flood, fire and theft but exclude earthquakes and vandalism. Also, take note of exceptions to the exclusions. Before signing, you can negotiate the terms and adjust them to suit your interest.
Read the remainder of the contract after reviewing the terms and conditions. If you need help understanding the document, you should contact a professional public insurance adjuster for assistance.
How to File an Insurance Claim
When you experience an event covered by your insurance policy, you can make a claim. The following steps show you how to make a claim:
- Report the incident: If applicable, such as in the event of a car accident or a burglary, report the incident to the police and seek medical assistance. Besides ensuring you’re OK, the police and medical professionals can be instrumental in supporting your insurance claim.
- Gather relevant documents: Collect all relevant documents, including any police and medical reports. Receipts for expenses related to the accident can also be helpful.
- Hire a public insurance adjuster: Hiring a public insurance adjuster is optional but highly recommended. These professionals have the experience to file your claim and get the highest possible settlement with your best interests in mind.
- Contact your insurance company: Contact your insurance company as soon as possible to inform them of the incident.
- Fill out and organize your paperwork: The insurance company may require you to file a claim on their website or physically at their office. At this stage, the insurance company primarily collects details surrounding the incident. Attach copies of the relevant documents you have and ensure the information you provide is accurate.
- Wait for the insurance company to assess the damage: The insurance provider will investigate your claim and appoint an adjuster to evaluate the full extent of the damage. If your claim is accepted, the insurance company will repair or replace the property or reimburse you for the expenses.
Contact Us at Performance Adjusting for Expert Support
Partnering with an experienced public adjuster has many advantages. Public adjusters take the load off your shoulders by examining your insurance policy and filing a claim on your behalf. Additionally, you can leverage their expertise to negotiate and get the best possible settlement.
Performance Adjusting is a leading public adjusting firm with years of experience helping policyholders get the value of their claims. Our trained and licensed adjusters practice in four states — Rhode Island, Massachusetts, Connecticut and Florida. Each client gets a dedicated professional to guide them throughout the process, so their best interests are always top of mind.
If you have a claim you want to process or would like to learn more about how we can help you, contact us today.
