Insurance Policies
Usually, you fill out an application for insurance.
You get a policy or contract (a written agreement) from the insurance company.
You are the policyholder or the insured.
You are insured against perils (things that cause loss or damage, like a fire or theft). Some insurance policies cover all perils, and some don’t.
Exclusions are things that your insurance policy does not cover. Make sure you know about all the exclusions so you don’t get a surprise.
If you add coverage for something extra on the policy, it is a called a rider.
For example, you can get a rider to your home insurance policy for extra insurance for valuable jewellery.
Paying for Insurance
The amount you pay for the insurance is the premium.
The insurance company decides on the premium using the information in your application.
For life and health insurance, the application will ask questions about your health.
You may need to have a doctor or nurse examine you or have your doctor give the insurance company some information.
The insurance company will decide on your premium depending on your age, gender, whether you smoke, and other information.
For property insurance, the application will ask you to describe the property and tell how you use it.
For example, if you drive your car to work every day, you will probably pay a higher premium than if you only use it on evenings and weekends.
Making a Claim
If you have a loss, you make a claim to the insurance company.
You need to show proof of the loss, such as receipts for health care expenses or a death certificate for a life insurance claim.
For property insurance, an adjuster from the insurance company will decide on the value of the damage to the property.
For property and health insurance, you pay for part of the loss – the deductible. The amount of the deductible is in your policy.
For example, if your claim is for $3,500 and your deductible is $200, the insurance company will pay you $3,300.
