Whenever you see articles about insurance, you will likely ready the term “policy” one too many times. While some car owners just recklessly sign at the bottom of the page without understanding the basic terms in their contract, others read the fine print and try to absorb as much information as possible.
Why is it important to know the ins and outs of your insurance policy? By knowing the clauses included in their policies, you can easily shop for a good insurance package at a very competitive price. Without resorting to technical terms and legal hullabaloo, here are some of the things you have to know about your insurance policy.
The definition of “policy”
An insurance policy is a written contract between the insurer and the user. In this contract, the terms and conditions of the contract are explicitly stated. Among the information included in the policy are the conditions how the insurance works, risks covered, conditions for claims, period of insurance, amount of premium, and so much more.
Why bother knowing what’s written in your policy?
As a customer, you need to be intelligent with your decisions and know every contract you’re bound to sign—that includes insurance policies.
For the insurance company, a policy serves as the acknowledgement receipt that you agree to the terms and services of your preferred insurance package. However, consumers have bigger uses for policies, as they are the very contract they can use when filing for claims. Using the policy, customers can demand a claim from the insurance firm in accordance to what is stated in the policy.
Understanding key terms included in the policy
When you read a policy, you will encounter a few more terms that may also confuse you. Some of the terms you will also encounter are:
Rights and Obligations. This section includes the legal rights and responsibilities of both parties, meaning the insurer and the policyholder, to themselves and to each other. This includes all related information about making claims, terms of payment, and other information related to you as their client.
Premium. The definition of premium is the amount of money to be paid by the customer for the services given by the insurance companies. Parties will have an agreement regarding the terms of payment and the amount to be paid regularly.
Claim. This is the policyholder’s request for reimbursement to the insurance company. To make a claim, the client must present facts that will hold the company