Guide

Understanding Your Insurance Policy

5 min read
Elite Claims Team

Your insurance policy is a legal contract that outlines your coverage, rights, and responsibilities. Understanding its key components can help you maximize your benefits and avoid surprises during the claims process.

Key Components of Your Policy

1. Declarations Page

This is the summary page that lists your personal information, property details, coverage limits, deductibles, and premium amounts. It's the first place to check when reviewing your policy.

2. Coverage Sections

Your policy is divided into different coverage sections, each protecting against specific types of losses:

  • Dwelling Coverage: Protects the structure of your home
  • Personal Property: Covers your belongings inside the home
  • Liability Protection: Protects you if someone is injured on your property
  • Additional Living Expenses: Covers temporary housing if your home is uninhabitable

3. Exclusions

These are specific situations or types of damage that your policy does NOT cover. Common exclusions include:

  • Flood damage (requires separate flood insurance)
  • Earthquake damage (requires separate earthquake insurance)
  • Normal wear and tear
  • Intentional damage
  • Certain types of water damage

4. Conditions

These outline your responsibilities as a policyholder, such as:

  • Promptly reporting claims
  • Cooperating with the insurance company's investigation
  • Protecting property from further damage
  • Maintaining accurate records

Important Terms to Know

Deductible
The amount you pay out-of-pocket before insurance coverage kicks in.
Premium
The amount you pay for your insurance coverage, typically monthly or annually.
Actual Cash Value (ACV)
The replacement cost minus depreciation.
Replacement Cost Value (RCV)
The cost to replace damaged property with new items of similar quality.
Coverage Limit
The maximum amount your insurance will pay for a covered loss.

Tips for Reviewing Your Policy

  1. Review annually: Your coverage needs may change over time
  2. Check coverage limits: Ensure they're adequate for your current property value
  3. Understand your deductible: Make sure you can afford it in case of a claim
  4. Know your exclusions: Consider additional coverage if needed
  5. Document your belongings: Keep an inventory of your personal property
  6. Ask questions: Don't hesitate to contact your agent for clarification

When to Update Your Policy

Consider reviewing and updating your policy when:

  • You make significant home improvements or renovations
  • You acquire valuable items (jewelry, art, electronics)
  • Your home's value increases significantly
  • You start a home-based business
  • Your family situation changes (marriage, children, etc.)

Need Help Understanding Your Policy?

Our experienced public adjusters can review your policy with you and help you understand your coverage before you need to file a claim.