Reading a policy

Section 02

A policy is easier to read if you start with the schedule and the definitions, then the exclusions, rather than with the first paragraph of marketing text.

Write down the policy name, the policy number, the period of cover, and the names of the people or the property listed on the schedule. Then find the definitions section. Words such as “accident”, “pre-existing”, or “household” may be given a meaning that is narrower than everyday use. When a term is defined, use that definition when you read the rest of the document.

Exclusions and conditions are often in a separate section. An exclusion is something the policy does not cover. A condition is something you may have to do (for example, notify a claim within a stated time, or keep a document) for a claim to be considered. If a time limit or a document is named, copy it down with the page or clause number.

If the document you have is a renewal, read the schedule again. Limits, excesses, and named items can change even when the wording looks familiar. A previous year’s document is not this year’s document.