6 Parts of an Insurance Policy

Understanding an insurance policy can feel like a big undertaking if you don’t have much experience with them. Knowing what six elements will likely be a part of every insurance policy can provide you with a solid foundation for understanding policies now and in the future.

Save yourself time and frustration and learn how to better understand your future insurance policies.

1. Declarations

The Declarations summarize the details of your insurance policy and generally includes:

• The type of coverage you have
• Policy details, such as the policy number and effective dates
• The names of the people covered
• The dollar limits of your coverage and your deductible
• A list of endorsements included in your policy
• Any discounts that apply

Why this matters:
Your Declarations page is the foundation of your policy. It confirms exactly who and what is protected. Taking a few minutes to review these details ensures your family, home, or business are covered the way you intended and prevents surprises later if you ever need to file a claim. If you read this document and notice that any of the listed details are incorrect, contact your insurance company right away to have them corrected.

2. Insuring Agreement

The Insuring Agreement is the main section of the insurance policy. This section typically explains:

• Who is covered under the policy
• What types of losses or events are covered
• How and when benefits are paid

After reading this section, you should have a broad overview of your coverage. Together, your Insuring Agreement, Exclusions and Glossary should provide you with a clear picture of what is and isn’t covered in the policy.

Why this matters:
This section helps you understand what your policy truly promises in exchange for your premium. Reviewing it closely helps you see the full scope of your protection so you know exactly what you are paying for and where additional coverage may be worth considering.

3. Exclusions

While the Insuring Agreement tells you what your plan does cover, the Exclusions section tells you what your plan doesn’t cover. The Exclusions section may also cover the exceptions to any exclusions. Be sure to read that section as well. There may be other exclusions throughout the policy to consider, besides what you find in the Exclusions section.

Why this matters:
Knowing what is not covered can be just as important as knowing what is. Reviewing the Exclusions helps you plan ahead and avoid surprises and gives you the chance to talk with your agent about filling any coverage gaps before they become problems.

4. Conditions

The Conditions section explains the rules and responsibilities that you and your insurance company must follow for your coverage to remain valid. It also outlines the circumstances in which a claim could be denied.

You will often find language in this section such as “always” or “never.” Pay close attention to those words, as they highlight actions or requirements that are essential to keeping your policy in good standing.

This section typically includes:

• Your responsibilities as the policyholder, such as notifying the company promptly after a loss
• Situations that may void or limit coverage
• The insurance company’s obligations when handling claims
• Steps to follow if you need to file or appeal a claim

Why this matters:
Understanding your policy’s Conditions helps you know what steps to take if you ever need to file a claim. Being aware of these details now can make the process smoother and prevent delays or denials when you need support most.

5. Endorsements

The Endorsements section of your insurance policy adds, removes or amends the coverage laid out in the policy. Endorsements can be added:

• When you first enroll in your policy
• During the policy term if your situation changes
• At renewal time when you review and update your coverage

Common reasons for endorsements include adding a new vehicle, adjusting coverage amounts, or updating property details.

Why this matters:
Endorsements allow you to tailor your insurance to fit your unique situation, whether you have added a new driver, bought equipment for your business, or upgraded your home. Reviewing your endorsements helps ensure your protection keeps pace with your life.

6. Glossary

The Glossary is an important resource when you’re reading your insurance policy. It provides definitions of words in the policy that may have distinct meanings in the insurance industry. If you are reading through your policy and see words in italics or bold, these terms will likely be in the Glossary, where you can reference them as needed.

Why this matters:
The Glossary helps translate insurance language into plain English so you can make informed decisions without confusion. It is your built-in reference guide for understanding your coverage and asking the right questions.

How Should You Review Your Insurance Policy?

Now that you understand the six main parts of an insurance policy, take a few minutes to review your own coverage with confidence. Set aside time to look through your documents and confirm that everything still reflects your current needs and goals.

Here’s a simple checklist to guide your review:

• Start with your Declarations to confirm names, coverage amounts, and deductibles are accurate.
• Read your Insuring Agreement to refresh your understanding of what your policy promises to cover.
• Review Exclusions to see if there are situations or items that may no longer fit your needs.
• Look at the Conditions to make sure you understand what is required to file a successful claim.
• Check any Endorsements to confirm recent life changes, property updates, or new assets are included.
• Use the Glossary to clarify any unfamiliar terms before making decisions about coverage.

When you receive your next policy renewal, use this list to compare the new version against your current coverage limits, deductibles, and endorsements. This small habit can save you time, prevent confusion, and help you stay protected as your life changes.

Final Thoughts

Insurance policies aren’t always easy to decipher. Continue learning about insurance policies and take the guesswork out of selecting coverage. If you live in Wisconsin or Minnesota and would like help reviewing your current policy or exploring coverage options, connect with one of our local Forward agents. We are proud to serve our neighbors and help move our communities forward.