There are several components that are included in every insurance policy such as a declaration page, insuring agreement, exclusions, endorsem*nts, conditions, and definitions.
Declaration Page
The declaration page of an insurance policy is an overview of the personal information of the insured and the insurance policy. It does not go into detail. The declaration page includes information such as the name of the insured and people covered, policy number, deductible, policy date, and premium. It makes it easy to understand what is in the policy without having to read the entire policy. The declaration page identifies the person insured, the risk covered, the policy limits, and the policy period. It differs for every person.
Insuring Agreement
The insuring agreement is a standard form that identifies the circ*mstances under which the insurance company will ensure an individual or company in exchange for premium payments. It does not change, it is the same in every policy unless an endorsem*nt is added that changes it. The insuring agreement is important because it tells the insured exactly what conditions need to be met in order for the insurance policy to pay out.
Exclusions
It is very important to understand what is excluded from an insurance policy. Exclusions are events or circ*mstances that occur that an insurance policy will not cover. When an insurance policy lists the exclusions that it will not cover this is called all-risk or open-peril coverage. Anything not listed under exclusions is covered by the policy. Examples of exclusions would be war, intentional loss, government action, neglect, or power failure. Policyholders can include an endorsem*nt to the insurance policy to cover circ*mstances that are not covered.
Conditions
A casualty insurance policy's conditions section outlines the requirements that must be satisfied for the insurance policy to be considered legitimate. In addition, this part will explain how to file a loss report, when and how a policy may be canceled, and how long the insured has to file a loss report. This section is important because an individual or company needs a clear understanding of what conditions need to be met so that the insurance is active and covers a loss. Not understanding the conditions in which insurance is valid can be extremely costly if damage occurs while the policy is inactive. Conditions are the requirements imposed upon a policyholder that must be met before an insurer is obligated to pay on a covered claim.
Endorsem*nts
An endorsem*nt is a document that changes a standard casualty insurance policy. Endorsem*nts are attached to insurance policies when an amendment to the insurance policy is needed. For example, a natural disaster may not be included in an insurance policy. A policy owner could elect to pay extra to cover the cost of hurricane or earthquake damage. In this case, an endorsem*nt would be added to the insurance policy that would change the coverage as stated in the insuring agreement. Endorsem*nts are not an essential part of an insurance policy. They alter the standard parts of a policy so endorsem*nts are not included in every policy.
Definitions
The definition section of a casualty insurance policy defines common terms found in the policy. Common terms may include policyholder, peril, premium, and effective date. An insurance policy is a legal document. It is imperative that there are no misunderstandings regarding the meaning of words.
To unlock this lesson you must be a Study.com Member.
Create your account
FAQs
Property and casualty insurance, or P&C insurance, covers personal damage to the insured party. Casualty insurance covers damages to another person not covered under the insurance. Casualty insurance does not cover the insured person or anyone covered by the insurance.
What are the parts of casualty insurance? ›
Casualty insurance includes vehicle insurance, liability insurance, and theft insurance. Liability losses are losses that occur as a result of the insured's interactions with others or their property. For homeowners or car owners, it's important to have casualty insurance, as damage can end up being a large expense.
What is the meaning of casualty insurance? ›
Casualty insurance refers to insurance that covers the legal responsibility of individuals and businesses for losses stemming from damage to another's property or an injury to another person. This protection addresses the financial liability that a business or an individual may be legally required to satisfy.
What is the summary of casualty insurance? ›
Casualty insurance is a broad type of coverage that protects individuals and businesses against legal liabilities resulting from accidents, injuries or property damages. It encompasses a variety of coverage types, including liability, theft, workers' compensation, aviation, auto, and cyber risk insurance among others.
What are the three main components of an insurance policy? ›
Three components of any insurance type are the premium, policy limit, and deductible.
What are the standard elements of a casualty insurance contract? ›
Casualty Insurance Components. There are several components that are included in every insurance policy such as a declaration page, insuring agreement, exclusions, endorsem*nts, conditions, and definitions.
What would a casualty insurance policy cover? ›
Casualty insurance provides liability protection, which helps protect you if you're found legally responsible for an accident that causes injuries to others or if you damage another person's property.
What is not covered by casualty insurance? ›
However, if the insured person files a claim under their own policy to fix the damage to their own vehicle under their collision coverage, this would not be covered by the policy's casualty coverage. This would fall under the property element of their auto insurance. The same is true for homeowners insurance.
What are the types of casualty? ›
There is a distinction between combat medical casualty and non-combat medical casualty. The former refers to a medical casualty that is a direct result of combat action; the latter refers to a medical casualty that is not a direct result of combat action.
What includes casualty? ›
Sources. In its military sense, the term "casualty" includes all those who are killed in action or who die of wounds, as well as those who are wounded, listed as missing, or taken prisoner of war.
Examples: A car accident that results in multiple injuries and one death is considered a casualty event. A natural disaster such as a hurricane or earthquake can result in many casualties as a result of collapsed buildings and other infrastructure.
What is primary casualty insurance? ›
• Primary Casualty coverage plans include Workers' Compensation, General Liability, Automobile Liability, Physical Damage and more, and can be part of a holistic insurance solution across property, casualty and financial lines.
Is casualty insurance the same as health insurance? ›
Casualty insurance is usually insurance concerned with liability, and less with personal health, asset security or life insurance. The most common example of it would be something like auto liability insurance or recreational vehicle insurance.
What are the three 3 main types of insurance? ›
Most experts agree that life, health, long-term disability, and auto insurance are the four types of insurance you must have.
What does subrogation mean? ›
When you file a claim, your insurer can try to recover costs from the person responsible for your injury or property damage. This is known as subrogation. For example: Your insurance company pays your doctor for your treatment following an auto accident that someone else caused.
What is the face amount of a $50,000 graded death benefit? ›
Explanation: The face amount of a graded death benefit life insurance policy when the policy is issued is under $50,000 initially, but increases over time. Graded death benefit policies are designed for individuals who may have difficulty obtaining traditional life insurance due to health issues.
What are the three basic parts of full coverage insurance? ›
Full coverage car insurance is protection that includes collision, comprehensive, and liability coverage. Often, you can supplement your insurance with uninsured motorist coverage, personal injury protection, medical payments, gap insurance, and other coverage options.
What are the parts of the insurance company? ›
Insurance companies are generally organized in five broad departments: claims, finance, legal, marketing and underwriting.
