How to Read ANY Insurance Policy

Rarely does any insurance practitioner, even hard core ones, undertake to read an entire policy, short of severe insomnia or boredom. Generally, a specific answer is being sought or a problem is being researched requiring review of only individual sections of the coverage form and/or its applicable endorsements.

Whether reading an entire policy or only sections, 12 specific “rules” apply to the reading of any policy form. These are not shortcuts to reading the policy, as there is no shortcut to reading any legal document, just a road map leading towards correct policy interpretation and application.

Twelve Rules for Reading an Insurance Policy

1. Ascertain who qualifies as an insured.
2. Annotate the policy form.
3. Confirm all forms and endorsements are attached.
4. Read the Insuring Agreement first.
5. Read the exclusions.
6. Read the exceptions to the exclusions.
7. When the policy refers to another section, read that section immediately.
8. Pay attention to the conjunctions used in a list.
9. Pay attention to key words and phrases.
10. Read and understand the definitions of specifically defined terms.
11. Understand and make sure all the policy conditions have been met.
12. Confirm the coverage limits are adequate for the loss.

This week, the Academy of Insurance hosts a webinar explaining each of these rules. In addition to these rules, the webinar explores why exclusions exist. If you desire to be able to interpret any coverage form and explain the exclusions and coverages to your clients – this is the webinar for you! Register today. Space is limited.