Insurance Policy Clauses You Need to Watch Out For

August 10th, 2021 abriinsurance
Insurance Policy Clauses - Abri Insurance

Welcome, readers! This is Abri News, where you’ll find helpful policy information to assist you in finding the best coverage for your needs. We cover a variety of topics here, including insurance plans, types of coverage, claim adjustments, conditions and clauses. Our most recent articles will give you the information you need to judge good insurance from bad insurance and determine the essential benefits of commercial car insurance. Whether an insurance company is capable of providing an adequate policy is based on your specific need and we dive deeper into the factors which separate reputable companies from companies which will cause you headaches down the road. As well, if you’re using your personal car for commercial use (i.e. any activity related to your business), you may be putting your liability coverage at risk. Check out those posts for more detailed information!

Today, we’ll be exploring the tiny, tiny world of small print. Every policy is accompanied by numerous clauses and exclusions, most of which are tedious to read and difficult to comprehend. When working with a reputable company, these clauses should protect both you and your insurer. However, certain clauses may be detrimental to your intended need for coverage or be incomprehensible upon first reading. The purpose of this blog post is to breakdown the most essential clauses and exclusions present in standard policies among a range of coverage types. We want to equip you with the knowledge you need to make the most informed decisions possible. This might not be the most exciting topic, but we find the intricacies of policy to be quite interesting! Additionally, there’s nothing more exciting to us than helping individuals understand their policy provisions!

Read Everything

The first piece of advice will also be the most important piece of advice we can offer you in this article: Read everything. Thoroughly review each document you receive from your insurance company before and after signing onto a policy. In the event of an accident or claim, you do not want to be taken off-guard by a policy clause you weren’t aware of. Ideally, an agent with the insurance company will walk you through each clause on the policy, however this isn’t always the case. If you need clarification on a certain clause, your insurance company should also be more than willing to explain the clause in a way you can understand.

Elements of an Insurance Agreement

Any insurance contract is composed of at least four parts (though multi-peril policies will have specific conditions for each of their forms of coverage). Those four parts are: the declaration page, the insuring agreement, exclusions, and conditions. We’ll briefly explain what each part entails before moving on to what you should look out for within your contract.


The declarations’ page includes the essential, basic information concerning your policy. This information includes the name of the insured, the property which is being insured, the policies specific limitations, the policy period, and the premium amount. Of course, when reviewing the declarations page, you should ensure this information is correct and appears exactly as agreed upon with your insurance agent.

Insuring Agreement

The insuring agreement is exactly what it sounds like. This part of the document states in broad-but-clear strokes exactly what the insurance company promises to do in the event of a certain loss. There are two types of insuring agreements. Those two types are the named-peril coverage agreement and the all-risk coverage agreement. A named-peril coverage agreement will list the specific perils which are covered by the policy. Therefore, any peril not explicitly listed on the agreement is not covered. Conversely, with an all-risk agreement, every peril is covered by default unless explicitly listed on the agreement. It’s important to understand the difference between these two types of agreements and, in the case of the former, ensure everything you need covered is indeed listed.


The exclusions section of an insurance contract delves deeper into what the insurance company will not cover and the circumstances in which they will deny a claim. This includes certain perils or causes for loss, as well as certain types of property. A microcosm example of an exclusion is a three-year warranty on a coffee maker which becomes void if damage occurs because of an “Act of God” (i.e. hurricane, fire, flood). In this way, insurers protect themselves from paying out claims they deem to be outside the scope of coverage.


The final portion of the standard insurance contract is the conditions section. You’ll want to pay particular attention to this section, as the clauses here can act as reasonable cause for an insurance company to deny a claim. This section is filled with provisions which limit (or qualify) and insurer’s promise to pay. If these conditions are not met, this is enough grounds for a claim to be denied. An example of a provision might be the submission of proof of loss and cooperation during an investigation. Read through these provisions and ensure you’re comfortable complying with each.

There may also be a section defining terms found within the contract, which should help you further comprehend the nature of what you’re signing.

Endorsements and Riders

Endorsements and riders appear on an insurance contract when the insurer has changed their policy. This section will include any alterations—including additions, deletions, and replacement of certain language—made to the contract. When your policy is updated it’s important to read through this section and ensure these changes do not impair your ability to be covered to your desired degree.

Free Look Period

Now that we’ve covered the basics, we’re able to dive into the specific clauses you should be aware of. The first is the free look period. A free look period is a window of time during which a policyholder can cancel a policy. This period only applies to life insurance policies. The policy can be cancelled for any reason and you will receive a full refund for any premiums paid during this time. Depending on your state and age, the free look period could be up to thirty days, but at least ten days are required by law. You can use this time to further investigate the terms of your policy and ensure all conditions are to your liking. However, if you decide to cancel your policy, be diligent and do not allow the free look period to pass before you begin the process.

Incontestability Clause

The incontestability clause also applies to life insurance policies. This clause allows an insurance company to deny a policyholder their death benefit in cases involving misrepresentation or fraud. Failing to share certain pertinent information with your insurance company could be considered misrepresentation or could be considered fraud. Depending on which side of the line you fall on, you could be denied death benefit or be paid an adjusted benefit. Or, you could have your policy cancelled and all premiums returned to you. The incontestability period lasts for between one and two years. After this period, the insurance company must pay out the death benefit.

Statutes of Limitation

For many forms of coverage, there are limitations on the amount of time allowed to pass after a loss (or damage) before a claim is filed. This is an important clause to be aware of when reviewing your contract, because time limits for claims can range from twenty-four hours to several weeks depending on your insurer. Entering a claim even a day late can result in a denied claim.

Maternity Care

When dealing with health care coverage, there will be numerous exclusions to account for, including pre-existing conditions and certain types of care (i.e. dental and vision). However, there can be vast discrepancies between your expected coverage and your actual coverage concerning your maternity care. Certain medical insurers may cover the costs of delivery and hospital stay, but only for a certain number of days. Or, they may cover the delivery, but exclude pre-natal care. Or, they may cover prenatal care, but exclude post-natal care. There are a myriad of possible coverage configurations and you’ll want to be certain of what you’re being offered before signing.

There are many other types of exclusions and conditions to be aware of. We hope, at least, we’ve impressed upon you the benefit of reading through your insurance contract carefully and being vigorous about understanding your specific policy. Again, an agent at a reputable insurance company will be willing to explain any policy clause with patience and in-depth. Ask about sections of the agreement you don’t understand or have an issue with and they may be able to help you find the coverage you’re looking for!

If you still need help finding the right insurance policy for your needs, reach out to us! Everyone here at Abri Insurance is eager to assist you in your search for the best coverage. Come back here to read the latest news and discover more about how to make the insurance industry work for you! Thanks for reading! Until next time!

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