How to Read Your Homeowners Insurance Policy

You own a home, huge investment right? OK, so you buy insurance .... But what is covered? This article will teach you how to read your policy with one simple acronym DICED, The who what when where why and how’s

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• An insurance policy and some reading glasses if needed :-D

1. D – Declaration Page – The first section of an insurance policy, which sets the following information:
   • The parties to the contract
   • The effective date and expiration date of the policy/contract
   • Who is covered (spouse, children etc.)
   • What is covered
   • Limits of coverage(How much)
   • Rates and premium
2. I – Insuring Agreements – Statements which set forth, in broad terms, the coverage’s in the insurance policy/contract
3. C- Conditions – Provisions which set the rights, duties, and responsibilities of the parties.
4. E- Exclusions – Limitations or restrictions of coverage granted by the insuring agreements.
5. D – Definitions – Define the terms of the policy/contract
6. Endorsements – Attachments to the policy which can clarify, extend, and/or restrict coverages, which change the original policy.

Tips & Warnings

• An insurance policy is a/an: Aleatory Contract -An insurance policy is an Aleatory Contract, The insurance company will only pay if there is a loss, and the insured may collect more that what he paid into the policy. Unilateral Contract – A one sided agreement whereby the insurance company makes legally enforceable promises, and the agreement is on the insurance companies terms (take it or leave it).