Types of Insurance Instruments

When you talk about the instruments of insurance, all you are really discussing are the parts of the insurance contract. Every type of contract including insurance is made up of specific sections that are explained below for insurance.

  • Declarations – This section lists the person that is insured along with the person’s address, the name of the insurance company, what is covered by the policy, the amount of insurance, if there are any deductible and the time period of the policy along with the amount of the premium.
  • Definitions – The portion only explains the words and terms that may not be understood by the person purchasing insurance.
  • Insurance agreement – This section will explain exactly what is covered and what type of damages the insurance covers. This is the promises that the insurance company is making to the person purchasing the insurance.
  • Exclusions – This is nothing more than items that will not be covered by the insurance.
  • Conditions – This section covers the obligations, duties, rules of conduct, and provisions that must be met by the person insured or the insurance company will not cover the damages.
  • Endorsements – In some cases, there may be other forms that may need to be included and are often difficult for the regular person to understand as they often delete or modify various clauses. It is always best to ensure that an underwriter that is knowledgeable when writing these pages or there could be problems in the future.
  • Policy riders – This section explains the terms of the policy including the amendments. Each one of these will be numbered and dated so you stay up to date with any endorsements to your policy.
  • Policy jackets – This section may actually be the most confusing part of your contract as it can include the standard policy but has been previously printed and does not include any endorsements or declarations.