How To Read An Insurance Policy | North Carolina Insurance Disputes LawyerYou may have car insurance, health insurance, and home insurance – and you may feel secure that if you were to suffer an accident, unforeseen event, or car crash, that you, your family, and your financial situation would be protected by the insurance plans that you pay premiums on. However, most people have never thoroughly read the insurance policies that they take so much comfort in. Although most people know that an insurance policy can help them in a time of need, they do not know the specific conditions and exclusions of their policies – and do not read their policies until after an incident has occurred.
While insurance policies can be dense, hard to understand, and confusing, it is very important that you understand the policy that you are paying for. Here are some simple tips on how to read and understand your insurance policy:
• Make sure the basic information is correct. Insurance policies contain mistakes more often than we’d like to think. Check that your personal information is correct, and that the rating classification is appropriate. Most key information is located in the Declarations section of the policy. If you are unsure if you’ve spotted a question, call your insurance agent and ask for clarification.
• Know your duties and responsibilities. While an insurance policy lists what the company will do for you in the event of an accident or issue, it also lists your obligations. If you do not meet these obligations, you may not be covered. For example, a car insurance policy may list a number of conditions that you must follow in the days after a car accident.
• Know your terms. Highlight any legal terms that you are unfamiliar with and look them up. Some insurance companies will include a glossary of commonly used terms and definitions.
• What are your policy limits, and are they sufficient? If you purchase an insurance policy with insufficient limits, you could end up paying the remainder of the balance out of pocket. If your limits are too high, you may be paying too much for the policy for what you need.
• Ask questions. There’s no such thing as a stupid question, especially when you are learning about your insurance coverage. Call your broker or agent and go over any and all questions you have after you have reviewed your policy.