Understanding Your Insurance Policy

Did you know that your insurance company can change your insurance coverage without requiring your signature? The policy of insurance you have with the insurance company is a legally enforceable contract. Therefore, anytime the insurance company wishes to change the terms of your policy, they must provide you with notice. In fact, insurance companies frequently change their insurance polices by issuing amendments.

These amendments are called endorsements. Endorsements usually arrive in the mail on one page with legal language that is often confusing and out of context. If you do not carefully read these endorsements, you may not realize that the insurance company has made a dramatic change to your coverage. Worse yet, you may be paying the same premium for less coverage. For example, your insurance company could send you an endorsement changing the definition of an insured to exclude members of your household. Such a change would dramatically affect your liability exposure in the event one of your family members causes an accident. In that example, since the insurance company changed the policy to exclude family members, then any accident caused by a family member would not be covered. You would then have liability exposure you did not expect.

This is only an example. However, the economy has created dramatic changes in the way insurance companies do business. I am now seeing many instances where insurance companies are excluding coverage for risks that used to be routinely covered. You should carefully read your policy to understand what is covered. Likewise, you should carefully read any endorsements to understand what has changed. Now more than ever, you need to understand your legal rights to best protect your home and family.

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