What does insurance actually cover?
The three words on every policy that decide whether you’re paid.
video coming soon — the written version is below
Every policy, whatever it’s for, comes down to three words. Learn to spot them and you can read almost any policy in a minute.
Covered. Excluded. Limit. Every claim comes down to those three.
The three words
Covered
What the policy promises to pay for.
On your policy: each coverage, listed by name.
Excluded
What it will never pay for, however it happens.
On your policy: the “Exclusions” section of the booklet.
Limit
The most it will pay. Above that line, the rest is yours.
On your policy: the amount beside each coverage.
A claim gets paid only when all three line up:
- It’s covered
- It’s not excluded
- It fits inside the limit
- Paid
Miss any one of the three and the answer changes. The limit is the one people forget:
Where to look on your policy
Start with the declarations page, usually the first page or two of your policy. People call it the “dec page.” It lists what’s covered and the limit for each coverage.
- Who and whenThe people insured and the dates the policy runs.
- What’s coveredEach coverage, listed by name.
- The limitThe most that coverage pays. Some show two amounts: per person and per accident.
- The deductibleWhat you pay first, before the policy pays.
Where are the exclusions? Not on the dec page. They’re in the policy booklet itself. Changes to the standard policy, called endorsements, are listed on the dec page and printed at the back. Can’t find your dec page? Here’s where to look.
What to do next
- Find your dec page. Your carrier’s app, your email, or our step-by-step guide.
- Pick one coverage and read its limit. Start with liability. It’s the one that protects you if you’re sued.
- Ask yourself one question: if this happened tomorrow, would that amount be enough?