CHAPTER 3 Standard Coverage You now know the policy is the contract between you and the insurance company, but what exactly is in it? The first item is the declarations page. This includes all the basics: your name and address, the policy’s time period, your premium amount, the coverages included in your policy, and each coverage’s limit per claim. The core of the policy is the insurance agreement, in which your insurance company agrees to make payments, where appropriate—either to you or on behalf of you. It also details the people who are covered by the policy, definitions of terms within the agreement, and any exclusions. Lastly, your policy contains conditions. These are explanations for everything involved in filing a claim, including getting proof, how long you have to file a claim, and more. It also states the cancellation terms, both for you and for the company. To see an example of what a policy looks like, check out Appendix A.
Horror Story: Motorcyclist’s Medical Bills
Bill was riding his motorcycle when he was hit by a distracted driver, Jon, totaling his $18,000 motorcycle and, even worse, causing serious physical injuries that wound up costing $87,000. Jon had insurance, but his property damage limit was $15,000, and his bodily injury limit was $50,000. This meant Jon had 10
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