Insurance Policy

Choosing an insurance policy should not be decided wholly on price, there is also a need to have a look at some of the terms and conditions of the insurance policy. Different insurance policies have different characteristics.

There are two important things to look for in an insurance policy, exclusions and conditions. Exclusions are where the insurance policy will not cover a claim that results from that activity but will not invalidate the policy for other claims (although the exclusions can be fairly wide). Conditions are where an insurance policy will be invalidated completely if this condition is found to be breached whether or not this had any effect on the claim.

With a life insurance policy one major thing to look out for is for are the exclusions. Life insurance policies will often have a number of exclusions that may not fit into the insured person’s life style. A particular set of exclusions are those for dangerous sports, which can be a particular issue for a term insurance policy which tend to be taken out by younger people. It is important to check if doing dangerous sports, and this can include skiing, that the life insurance policy will cover this. Exclusions can also be an issue with a health insurance policy. Travel insurance has such an issue with this, particularly with skiing, that a travel insurance policy will often advertise itself as being with or without dangerous sports coverage.

A term to look for in an auto insurance policy are the covered drivers and how much each driver really uses the car. If there is a discrepancy then an insurance company can try to cancel an insurance policy and deny an insurance claim. A no claims certificate can be a condition of an insurance policy, so even if there where no claims in the previous year the lack of a certificate can also invalidate a policy and claims can be denied. If an uninsured driver is driving a car when an accident occurs, it is very likely that this exclusion will result in the claim not being paid.

Conditions are often an issue with a homeowners insurance policy. It can often be a condition of a house insurance policy to have a certain type of lock or burglar alarm. If that type of lock or burglar alarm is not fitted, even if there is a strong lock or alarm in place, the insurance policy may be made invalid. Many of the cheapest home insurance policies have extensive conditions and these can often essentially invalidate the home insurance policy.

A travel insurance policy can have exclusions on where to travel to and these can be changed at short notice. These exclusions will almost never cover North America or Western Europe, but certain common destinations, such as parts of South America, can be excluded.

A health insurance policy will often exclude pre-existing conditions. This does not mean that if an unrelated health problem emerges that the person is not covered, but that if the pre-existing condition had a significant impact on the health problem then the treatment will not be covered.