Insurance policies may start by declaring what it covers in very wide terms and then proceed to restrict, limit, and exclude coverages, or it may go straight to list only the perils that are covered. It will typically have the following sections: a declarations page, coverage form, and endorsements. Together, these sections lay out all the legally binding details of your policy.

• Declaration page, or Dec page for short, is a summary of your insurance policy contract. If there’s one section that you need to read, it’s this one. It’s a sneak peek of the remainder of the agreement as it states the insured person, what is covered, what are the limits and deductibles, what is the period you are covered for (policy start and expiry date), and what premium (price) you will pay for in return for being insured. Make sure all the information on the Dec page is accurate, including your personal details and things like the coverage, period and premium.  As policies usually last 12 months, this is something you’ll need to review every year.
• Coverage form (also called policy form) is a standardized part of the contract. If you sift through the coverage form, you will find the following subsections:
  • Definitions – These are meant to define the meaning of the main terms so that there’s no confusion.
  • Insuring agreement (sometimes called Policy Coverage) – This section tells you what the insurer promises to cover or do under the insurance policy. It defines the scope of coverage, which can then be narrowed down by the policy exclusions. The insuring agreement usually contains emphasized words – in bold font, italics or quotation marks – indicating that these words are defined for purposes of the policy as presented in the definitions. Make sure you refer to the definitions when reading this section.
  • Exclusions – Listing property, losses, and causes of losses or perils that are not covered. There may be three reasons why some risks are excluded. First, because another type of policy covers them. For example, a commercial auto policy excludes some obligations when you are insured against them under another kind of policy – workers’ compensation policy. Second, some risks can be covered by the existing type of policy, but for an extra premium. For example, a homeowners insurance policy usually excludes earth movements, which means that damage due to earthquakes, mudflows and sinkholes will not be covered. Still, you can add this coverage for an extra premium. Third, some risks are outright uninsurable. For example, the risk of losses due to war is uninsurable, so it’s excluded. Make sure you understand the exclusions as this section is the common source of unpleasant surprises after making a claim.
• Conditions – This section describes your obligations under the contract so that you can get compensated for a loss. If you don’t follow these rules, the insurance company may deny coverage that it would otherwise provide under the policy. For example, the coverage will be conditional on your premium payments or duties to follow after a loss.
• Endorsements. This section is attached to the policy and is important because it modifies the coverage page in some significant ways. It can add coverage (for example, you can add an earth movement coverage to your homeowners insurance, otherwise excluded), but it can also restrict or change the coverage (for example, by modifying definitions). It is a very technical section because it will change, delete or expand terms of the policy that are located elsewhere in the contract – usually in the coverage page or Dec page.