Do you Read Your Insurance Policy?
The answer to the above question is probably not – and who could blame you? Insurance policies are wordy, complex and written entirely in legalese – making it very hard for someone who hasn’t been licensed in insurance to understand.
But just because its hard does not mean it’s impossible. We will always advocate using an insurance broker to help you (we are insurance brokers after all), but there are a few techniques that can really help you sort things out. With a little patience and effort, you can get the useful information from your declaration page to help you understand and apply your insurance.
Disclaimer: All Declaration Pages are Different
The problem with giving you advice on how to read a declaration page is that they are all constructed differently. The premium might be listed in the center of the front page on one, while being tucked away into a neat corner in the other. The best thing we can do is try and help you avoid some common mistakes, to make your read a little bit easier.
None of what we say will always work – in fact some of it might not work at all for your current policy, that’s why the strategy we really recommend is strategy #3.
Strategy 1: Look for Keywords
Your best bet to reading all types of declaration pages is to understand the lingo of the industry. That is far easier said then done, but you already know a few of them, like premium or deductible (if you don’t know them check our blog for an upcoming post about insurance terminology!)
Some of the words that we recommend looking out for:
- Policy Term or Renewal Date: This tells you when you insurance will expire. Make sure you note the date so you have your finances ready to renew the policy, or use it as a chance for you to look for other markets who might offer you a better deal!
- Policy Number: This is how your insurance company knows you. If you are trying to contact them, you will need to be able to provide this number
- Discounts: Usually near where the coverages are, there should be a box or column that either lists discounts, or lists discount codes. If your policy just shows codes, look on the back page – there is usually a legend that explains what the code means.
- Warranty: A Warranty is a requirement that you must uphold if your insurance is to be honored. So if your insurance policy states that there is a warranty for your vehicle to be locked, you won’t be covered if you allow your car’s lock system to fail, or forget to lock your car when you park it.
Strategy 2: Read Numbers, Not Words
Words can be confusing, but numbers, especially currency, can sometimes be simpler. If you look for the amounts you are being charged, they usually correspond to aspects of your insurance policy.
You can use this technique to understand what coverage you have, by just searching for what your insurance company is billing you for. Often, companies will include a brief definition alongside the charge, so you will get to know more specifics, although this is not always the case.
Many items are automatically a part of your policy without paying, so you will sometimes see “included” instead of a premium amount, that’s completely normal. However, included items should still always appear in your policy, how else are you supposed to know what coverage you have?
Strategy 3: Use a Broker
The strategy we like the most is this one (and not just because it keeps us in a job). There is a lot to read in your declaration page, and a bunch of finer details that you simply won’t have the time to learn about or from.
Insurance Brokers, however, learn all about Insurance and spread the acquisition cost over hundreds of clients, so you pay very little for a professional to go over your contract. Brokers will not miss little changes and they know exactly what to look for, and because they have a fiduciary duty towards you, they can be held accountable if they mess your policy up.
McDougall Insurance won’t be messing anything up – we’ve been in the insurance business for over 70 years! If you want to see if we can earn your business, give us a call at 1-800-361-0941 or get an online quote now.