Understanding Insurance Policy Terms And Conditions

Understanding insurance terms and conditions can be confusing to say the least. However it is incredibly important for you to have at least a working understanding of the verbiage that is contained within your policies. That way you will be a well informed consumer that has a grip on how your choice of insurance will ultimately affect your life. In essence, the more the you known the better off you will be when you need to count on your insurance policies to protect your assets and property. You just never know when a disaster will strike, and disasters are bound to happen. The following information will explain some key terms and conditions that are in the small print of your policies.

The Insurance Deductible

The insurance deductible is the amount of money that you pay out of pocket when you make an insurance claim. People that choose higher deductibles pay less money for the policy, but more money when they file a claim. For example, you may have the choice to pay a $500 or a $1,000 deductible on your automobile insurance policy. If you choose the $1,000 option, your monthly, quarterly, or lump sum insurance policy payments will be approximately 25% less than if you choose the $500 option. However, if you are in an automobile accident and file a claim, you will pay $1,000 out of pocket instead of $500 out of pocket. It is a delicate balance whether to save money now, or in the future when you file a claim.


Exclusions are basically the items that are not covered as part of your insurance plan. For example, your homeowners’ insurance policy may very well not cover floods. That means you need to have a separate flood insurance policy if your property is at risk of flooding. A great deal of property owners are under the false assumption that the homeowners policy covers every type of disaster including floods. Imagine their surprise when they enter a claim only to find out that floods are not covered? That is exactly why it is so important to read the fine print of your insurance policies, and work with an insurance agent that will explain everything in detail. You certainly do not need any surprises when dealing with an unpleasant situation.

Special Limits

A plethora of insurance policies are capped regarding the amount of money that they will pay out when a claim is filled. For example, your automobile insurance will pay out a maximum of $100,000, and you caused an accident and are being sued for $1,000,000. If you are unaware of the special limits that your policy provides, you may very well be responsible for paying the difference. Once again, always read the fine print and work with an insurance agent that will take the time and make the effort to ensure that you are properly covered.

Basis Of Claims Settlement

The basis of claims section basically spells out the terms on how the claim will be paid. For example, home insurance claims can be paid in replacement costs or cash value. The terms of the claim settlements can make a considerable difference on how much money is actually disbursed.  That is yet another reason why it is so crucial to work with an insurance agent that will explain to you how the claims are paid, and what to expect from the claim process.

In conclusion, it is important to fully understand exactly what you are buying when it comes to insurance policies. If you have any questions, please call (508) 831-0133 to contact an associate at Zawada Insurance. We are happy to walk you through the details of your insurance policies and explain your coverage options. We look forward to helping you with all of your personal and or business related insurance needs.

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