how to read and understand any insurance policy

Insurance Journal’s Academy of Insurance Training Series How to Read and Understand ANY Insurance Policy

© 2012 by Wells Media Group, Inc.

How to Read and Understand ANY Insurance Policy



The WebEx platform we use allows you to interact and communicate with us during the class. There are two ways to ask questions:

1. You can raise a “virtual hand.” If you have entered your Audio PIN, we can unmute your phone and you can ask a question;

2. You can type your question in the Question or Chat box. Your question will appear on our screens and we will answer your question.

We will address all questions before the end of this session. Questions will be answered at the END of class to allow us to get through all the planned material. Within three business days of this class you will receive a copy of the recorded class and a copy of the slides used during the presentation.



The Academy of Insurance’s Online Professional Training Series

Christopher J. Boggs Director of Education

IJ Academy of Insurance

CPCU, ARM, ALCM, LPCS, AAI, APA, CWCA, CRIS, AINS

More than 22 years insurance experience



1. Determine who qualifies as an “Insured”

7. Immediately read referenced sections

2. Annotate the policy 8. Pay attention to conjunctions

3. Compare forms and endorsements to declaration page

9. Pay attention to key words and phrases

4. Read the Insuring Agreement first

10. Understand specifically defined terms

5. Read exclusions after reading the insuring agreement

11. Confirm policy conditions have been met

6. Read exceptions to the exclusions

12. Confirm adequate coverage limits



Four levels of “Insured”

Named insured Extended (Additionally Listed based on entity type)

insureds Automatic insureds

Additional insureds (by endorsement)

If the person or entity suffering or causing the loss, injury or damage does not qualify as an insured, there is no need to go any further - there is no coverage.



This is the broadest the coverage is EVER going to be, so

start here. Commercial Property: We will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss. General Liability: We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. We will have the right and duty to defend the insured against any "suit" seeking those damages. However, we will have no duty to defend the insured against any "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply….



Special Cause of Loss Property and most Liability Forms: Coverage is created when the loss or activity is not excluded.

Named Peril Property and CGL’s Coverage Part “B” (Personal and Advertising Injury): Loss/claim is covered only if the peril or action is specifically listed. In these cases, read the list of covered perils FIRST, then read the exclusions.



It's easier for the carrier to give coverage back by exception than to delete coverage using a long list of exclusions!

Excluding coverage and giving some of it back allows the

insurance carrier to dictate the exact amount of coverage they are willing to offer. They control the breadth of coverage.

Taking coverage away and giving it back in pre-determined

amounts makes far more sense and reduces the potential for confusion.

This tactic is used in property and liability coverage forms.



Three categories of exclusions:

Excluded “perils” Excluded “hazards”

Excluded “property”

From these three broad exclusionary categories flow the six reasons for policy exclusions.



1. The peril or property is better covered elsewhere

2. The loss or damage is collectively catastrophic in nature

3. The loss or damage is not accidental or unforeseen

4. The insurance carrier is willing to provide coverage; they just want more information and more premium

5. The insurance carrier wants to control the amount of coverage granted

6. The loss results from a "speculative" or business risk



"And" is inclusive.

"Or" is exclusive.

If there is a list of five qualifiers, the use of "and" means that all five must be satisfied. "Or" means that if any of

the five apply, coverage is granted or excluded (or whatever the list provides).



“Not”

"Greater than…"

"Lesser than…"

"Greater of…"

"Lesser of…"

"No more than"

"The most…"

"All"

“Any”

"Unless,"

"Except"

"Only if…"

"Subject to…"

"However"

"Includes"

"Must"

"Regardless"

"First"



Duties in the Event of Loss or Damage

Recovered Property

Vacancy

Coinsurance

Duties in the Event of Occurrence, Offense, Claim or Suit

Legal Action Against Us



Contact Information

Chris Boggs, CPCU, ARM, ALCM, LPCS, AAI, APA, CWCA, CRIS, AINS Director of Education Insurance Journal Academy of Insurance [email protected] 800-897-9965 x137 619-621-1440

how to read and understand any insurance policy

Documents