Did you know that insurance is the only product where you are not provided the warranty details until after you buy it?
In this post we will explain the difference between a Quote, Application for insurance, Declarations page and insurance policy.
What is an insurance quote?
An insurance quote is a document that provides you a preliminary price on coverage that can be offered to you if you qualify. The pricing is based on the facts entered when building up the quote.
What is an insurance application?
An insurance application is where you will provide facts to the insurance company. All the facts about you, all the facts about how you will use and all the facts about how you will protect what you want to insure. All your personal details have to be on this application. Along with the details of your household and any other individuals that will benefit from having insurance on what you are asking to insure.
What is a declarations page?
An insurance declarations page is where the insurance company declares the maximum amount of insurance they will pay. It will list what is insured and who is insured. With the maximum amounts of coverage shown, along with the pricing.
What is a policy or policy jacket?
An insurance policy or policy jacket is basically the warranty term and conditions for your insurance coverage. It states the rules, the expectations over you as the insured, your responsibilities and how they will fully cover or limit coverage over what you are insuring. It will also state what will void the coverage and what you are agreeing to do should you ever feel wronged by the insurance company.
In what order do these insurance documents arrive to me?
- Insurance quote
- Insurance application
- Declarations page
- Insurance policy
Why should this be important to me as an insurance consumer?
Unfortunately, in the world of insurance there is more sales people than actual insurance professionals that understand what they are selling their valued clientele. So staying informed will help you stay protected and you won’t easily fall into the traps set for you by the insurance industry.
What are terms and conditions I should look for when reading my insurance policy?
Exclusions! Look at all the pages and read what is excluded. Because many times what you were promised to be covered will likely be in the exclusions and, it’s better to find out now than later on after an accident.
Secondly, you should also look at the Endorsements list. Many times the insurance carrier and their agents will highlight certain coverage that comes into play as an endorsement. Then when you actually read the policy you’ll see how limited or broad the endorsement actually is.
For example; Travelers Insurance, a premiere Auto, Home & Business insurance carrier that we represent, has a New Car Replacement endorsement on their auto policy. The marketing around it indicates that you will be given enough for a newer car if you total the one insured. However, the actual endorsement actually reads that you will only be given up to 120% of the Original Manufacturers Suggested Retail Price. So 20% above what your vehicle’s suggested retail price. – This may or may not be enough to buy a car one year newer but simply understanding what the endorsement will cover makes you one smart insurance consumer!
How do I learn more?
At TCS Insurance Brokers we focus on helping all consumers understand their insurance coverage. Regardless if insurance is with us or through another agency. When we are all savvy insurance consumers we all win! – So please connect with us on social media, follow our blog or contact us today.