The basic elements of insurance policy coverage are the application, declaration sheet and endorsement.
The application: Application is one of the major parts in the insurance policy. The insured must fill all the information in the application, with out holding any information.
The declaration sheet: The declaration sheet includes the terms of coverage, time period of policy, and limits of liability on per claim.
Endorsement: Insurer changes the coverage by using endorsement. Endorsement can add the coverage or limit the coverage.
There are different types of policy coverages. For example the Car Insurance policy coverages are,
- Bodily injured liability: The insurance covers the people’s bodily injuries and death.
- Property damage coverage: The policy covers if car damages any property.
Physical damage coverage:
- Comprehensive coverage: Insurance covers the car, if it is damaged by floods, animals, and if it is stolen.
- Collision coverage: Insurance covers, when the car hits another car and if is damaged.
These types of coverages provide only with legal defense if another party files a lawsuit against insured. These coverages are limited to terms and conditions of the policy.