On April 27, 2022, Wheeler, DiUlio & Barnabei hosted the fourth installment of their 12-part webinar series, The Perfect Claim. The goal of this series is to discuss the entire claims process from start to finish so people can learn how to resolve claims more efficiently.
This webinar focused on reading, comprehending, and reviewing insurance policies. Partner Anthony DiUlio discussed how to properly read a policy, differentiate unique aspects of each policy, and identify key distinctions for understanding a policy.
Types of Insurance Policies
There are a variety of standard residential and commercial policy types. In addition, no two policies are the same. It is very important to understand the difference between each one to make sure you are submitting the proper claim. Here is an overview of each type of policy:
- HO-1 – Basic named peril, structure only, no liability
- HO-2 – Basic named peril, structure, contents, liability
- HO-3 – All risk on structure, owner-occupied, contents NP, and liability
- HO-4 – Renter’s policy, contents
- HO-5 – All risk on structure and contents
- HO-6 – Condo policy, personal property, improvements, and liability
How to Read an Insurance Policy
The first thing to understand about reading an insurance policy is the layout. A general layout of a homeowner’s insurance policy is the following:
- Table of contents
- Agreement
- Definitions
- Section I – Property Coverages
- Covered areas
- Property not covered
- Additional coverages
- Losses insured
- Losses not insured
- Section I – Loss Settlement
- Section I – Conditions
- Section II – Liability
It’s important to note that no two policies are the same. Be sure to double-check these standards with your actual policy.
The next critical element to reading an insurance policy is the Declaration Page(s). The Dec Pages are the index to the policy. These pages are crucial to the success of the claim as they contain important information. Here are items included in the Dec Pages:
- Name of the insured – Identifying the name of the insured makes sure you are dealing with the right person in regard to the claim. You know who has rights to the claim and you know whose name should be on the issued checks, etc.
- Mailing address & insured address – The mailing address assists with residency claims. It is also important to know that if the mailing address is different from the insured address, the carrier was on notice that the insured was not at the property.
- Limits of the claim and policy
- Forms – This is often the number one thing missed in filing a claim. It is critical that you understand what they are, what they mean, and how they tie in with the policy.
- Potentially conflicting information
- Deductible – Also, make sure the carrier is calculating the appropriate amount.
Another element reading the policy is the renewal package. The renewal package includes any changes that occurred and any forms missed without sending the entire policy.
This package is rarely the complete policy as the package may only contain about 9 pages while the standard policy is over 70 pages. Be sure to read the entire policy so you have a comprehensive understanding of expectations and more.
How to Understand an Insurance Policy
The most important aspects of understanding any insurance policy are recognizing that words matter and that every policy is different.
Read the policy in its entirety and know what your policy says to help you defend your position. Be sure to pay special attention to the definitions outlined in the policy as these are critical to understanding the policy.
As mentioned, forms are the number one item missing from filed claims. But forms are critical to analysis as they contain all necessary information about the policy.
Forms often take the identification of “LL ## ## MM YY.” LL is the line of insurance or type, ## is the form number and type, and MM YY is the month and year. All of these numbers and letters matter as they tell you what forms are in the policy and they match up with pages in the policy itself.
These identifiers can confirm the location of the form and allow you to check that you have everything filed completely. On the other hand, having the direct title of the form is extremely valuable.
The Differences and Tricks to Policy Interpretation
As mentioned, all policies are different. Read them consciously and carefully. Also, review the policy as a whole. You may find information in other sections that may shock you, that may support your defense, or that contain ambiguous or unique language. In addition, be aware of anti-concurrent causation language with hidden caveats. Watch the replay of this webinar for more concrete examples.
Have any questions about the claims process? Contact our team to learn more from the professionals at Wheeler, DiUlio & Barnabei.
