Personal Property Insurance Policy & Declarations You Need to Know

Before you sign for property insurance contracts there are several things like conditions, insuring agreement, exclusions, definitions and declarations that you must understand. In Declarations, you will find summary about important information that is not listed in other components of insurance policy, like the identity and name of the insured, length of policy, limit of insurance and how much premium charged. Bellow are 5 property insurance declarations that is listed in insurance policy, and you must fully understand before signing the policy.

Entities Who is Insured.
Insurance policy is a personal contract; hence the name of the person who is insured must be listed first. Name of “insured” can be listed as person, business, organizations or other article/entity that the policy is issued. How about if there are two or more entities insured in the policy? In this case, a higher level of privileged is give to the first name listed in insurance policy.

In some circumstance the policy can cover other entities like persons, business, as an insured party who are not listed or endorse. For instance, a homeowners can buy additional homeowners insurance policy protection to cover other family members (who lived in the house) personal properties and liabilities exposures.

What Property Is Covered and Where.
The declarations also describe the property to be insured. Insurance written with one or more limits that apply to particular items to be insured, such as a single piece of fine art or a building at a given location, is called specific insurance. Insurance written with a limit that applies to all kinds of property at one or more locations is called blanket insurance.

Although individual items can be described on personal property floaters or some endorsements, generally personal property insurance with various limits that apply to different classes of property is still considered to be “specific insurance.” The fact that individual items of personal property (furniture, appliances, clothing, and so on) do not have to be listed does not make a homeowners policy a blanket insurance policy.

The term “blanket insurance” means a policy that has a single limit that applies to all property (including buildings, personal property, property of others, and so on) at a given location or multiple locations. For example, a retail store chain with four locations might want a blanket policy with a single limit to cover all of its locations so that it could transfer inventory between its stores and not have to worry about whether the individual limit of insurance at each location was adequate.

An almost endless variety of property can be insured buildings (real property), tangible and intangible business and personal property, property owned by the insured, and non owned property. This is known as business property insurance. In addition to the brief description contained in the declarations, the Insuring Agreements describe in detail the property that is covered by the policy.

When Property Is Insured.
Personal property insurance policies specify the date and time, including where and in what time zone, coverage begins and ends. This is known as the policy period. In some states, the exact time of day policies start and stop is set by law to maintain uniformity between companies and to prevent gaps in coverage when an insured changes insurance companies. In most jurisdictions, policies begin and end at 12:01 a.m. (one minute after midnight) on the effective and expiration dates.

Exact dates and time are important for determining when insurance starts and ends, and it is important for agents and insured to understand this

How Much Property Is Insured For.
The declarations also show the policy limit or limits, also known as the limit of coverage, limit of liability, or limit of insurance. These limits represent the maximum amount the insurance company will pay for a loss. Within this framework, the principle of indemnity and applicable policy conditions are used to determine the exact reimbursement in the event of a loss.

For certain hard-to-value items, the insurance company might issue a valued or agreed amount of enough homeowner’s insurance contract. Valued contracts are written for a specified amount, and they list the value of the insured property as agreed to by both the insured and the insurer at policy inception. If the item is damaged, this is the amount that will be used to value the loss. This avoids the difficulty of trying to determine the value of such property after it has already been damaged or destroyed. Examples of property frequently covered on a valued basis are art work and jewelry.

Endorsements That Apply.
A final item usually included in the declarations is a list of any endorsements attached to the policy. These are usually listed by form number. This gives underwriters and agents a snapshot view of what is, or should be, attached to the basic policy form. Agents should be on the lookout for any restrictive endorsements that were not requested or expected as well as any endorsements that were requested and are not actually part of the contract.©