Insurance Agreement Samples: A Detailed Guide

What Exactly is an Insurance Agreement?

What is an Insurance Agreement/Contract?
An insurance agreement is a type of contract that is undertaken between an insurance policyholder and the insurance company. The basic premise of the contract is simple enough – in exchange for the policyholder’s premium (basically payment), the insurer agrees to pay out a certain amount in the event of a claim being made against the policy for damages, loss or other grievance.
Of course, the devil is in the details, and this is where the agreement becomes more complex. When you take out an insurance policy you are agreeing to the provisions laid out in the policy document (policies are often around 20 pages long or greater) so it’s important to know exactly what you are signing and what protections you are actually signing up for.
These provisions could include anything from guidelines about what and what is not covered, how much excess you need to pay before the insurer will make payment, how long the insurer can take to pay out, how long you can take to make a claim and so on. Of course one of the most important components is the sum insured , that is the max cap that the insurer is prepared to pay out once a successful claim has been made.
The insurance agreement is entered into when the insurance company accepts your premium and pays you a policy schedule. This outlines the details of the cover, including type, duration, sum insured, excess, items that are and are not covered and any limits to the cover that has been purchased. As part of the agreement the insurance company is not permitted to change these terms, however they can update the policy if for example you move from a rental to an owned property or you change jobs so that the insurer has more or less risk (for example: if you work with hazardous chemicals them the insurer may increase your premium).
Insurance agreements are there for the benefit of both insurers and policyholders. They allow the insurer to gauge the risk of providing insurance to the policyholder and offer premiums at a level commensurate with the potential claims that might be made. It also means that the policyholder has a set of provisions and protections in place and they can rest assured that if something goes wrong they will be covered financially to the limit of the policy as stated in the schedule.

The Crucial Components of an Insurance Agreement Sample

Generally speaking, an insurance agreement sample contains four sections: declarations, terms and conditions, exclusions, and endorsements.
Declarations are the easy part. They’re a simple list of the information used by the insurance company to create the deal. What is the name of the insured? Where are they located? How long is coverage effective? Things like that.
Terms and conditions get more involved. Now, the insurance carrier lays out what is actually covered. This includes definitions of any relevant key terms, the time period when the coverage is in force, the premium amount, and the schedule of coverage, which identifies the assets and investment the insurer is covering.
It is very important to understand that this section often relies on the definitions provided within the terms and conditions. Those definitions will tend to favor the insurer. Be sure to read them carefully.
Exclusions are a major focus of insurance underwriting. Not only does each policy include specific exclusions, it’s common for exclusions to be included among the definitions of terms and conditions. As such, it’s important to make sure you understand how your insurance policy protects your assets by knowing exactly what it doesn’t cover. In addition, be aware that there may be exception to exclusions.
Additional terms and conditions that don’t fall under exclusions or endorsements, terms and conditions remain in effect with no missing exclusions or exceptions. If you have rights under an insurance policy, they will be outlined here.

Interpreting and Comprehending an Insurance Agreement

Insurance agreements tend to be notorious for being overly complicated, filled with dense legal jargon. The reality is not that they’re particularly difficult to read, but that it’s easy to be thrown off by the language. Not only is this alienating to the average consumer, but it’s also something that erodes consumer trust in the industry as a whole.
So what’s a savvy insurance customer to do? Get comfortable with the terminology, for starters! Here are some basics to keep in mind when you’re reading your agreement:
The contract of insurance is composed of the following parts:
• The agreement
• The property being covered
• The type of peril covered
• The amount of the insurance
• The premium charged
• The signatures of the parties
• Any additional provisions
Let’s take a look at what these terms really mean:
All insurance agreements:
• Name the parties involved (the insured and the insurer)
• Identify the property being covered (it could be a home, property, automobile, etc.)
• Identify the type of peril or risk being covered (flood, fire, theft, etc.)
• Detail the amount or limit of insurance purchased
• Identify how long the agreement is applicable (the term)
• Give a premium (amount) to be paid
• Include the required signatures
There is no singular insurance agreement template. The type of agreement is determined according to the type of insurance. However, all insurance agreements have the above information, which can make it easier for you to determine important details in your agreement.
Key clauses to look for in your insurance policy include:
• The Premium
• The Exclusions
• Terms of Cancellation
• Terms of Renewal
• The Void or Avoidance Clause
• The Claims Provisions and Procedure
• Policy Limitation and Extension Clauses
• What is Insured
• What is not Insured
Make sure to take the time to read through your agreement. In most cases, if the insurance company doesn’t offer any samples, you can find an example insurance agreement online. Look for an example of the same type of agreement that you are interested in so you have some context.

Frequently Made Errors in Insurance Agreements

One of the most common mistakes people and companies make when they receive an insurance agreement for their signature is that they do not read it thoroughly. Frequently this is the result of a client who has been assured by their broker or agent that the program is "standard" and not to worry about the provisions, or a promise that the broker/agent will take care of it. I recommend people read every "i" and cross every "t" of the indemnity agreement before their signature is applied. Even if you have confidence in the broker or agent, your company may be the one that suffers an uninsured loss as a result of some poorly drafted language in the policy or endorsement. A second important area is the contract is that it not be considered "take it or leave it". Most brokers and companies have a vested interest in keeping their premium volume with a particular paper. However, pushing back on more onerous terms and conditions may prove beneficial in the long run. In other words, there are very few underwriters that do not see a problem with acceptance of a liability without negligence. It may not just be words, but how they approach the exposures at hand that can make a huge difference in costs. A third mistake is not having any discussions with the broker, agent, or underwriter in regard to the scope of coverage, applicable exclusions, and any endorsements. If it is not obvious what the intention of the clause means or what it covers, do not be afraid to come and simply ask. There should not be any apprehension in asking questions no matter how many times you have placed insurance through the same broker: this type of practice has saved many clients money and limited exposure.

Tailoring an Insurance Agreement to Suit Specific Requirements

Policyholders are not required to simply accept the terms of insurance agreements that are proposed. They are free to negotiate insurance agreements and possibly add or remove language in the insurance agreement to better meet their needs or better cover their financial exposures.
For example, a policyholder may not agree with a standard insurance agreement term that only covers risks for a period of one year. Therefore, the policyholder can ask an insurance agent to try and obtain an agreement that covers a longer period of time. In another example, an insurance agent may propose an agreement with a limit cap for certain forms of coverage such as liability. The policyholder is free to try and negotiate higher liability coverage limits . Examples of an agreement that contracts out of statutory obligations include crop insurance policies that limit recovery to what the crop insurance program has paid in the past. Also, warranties that claim to be non-cancelable unless fraud is proven. These terms should be negotiated by the policyholder beforehand.
In addition to negotiating changes to the insurance agreement, sometimes information about value is required to be provided by the policyholder to the insurance company. Sometimes, the information is required to establish the worth of a property. For example, an insurance agreement covering works of art may require the policyholder to provide valuations of the art pieces. These valuation documents should be clearly written and should be reviewed by the policyholder or those in charge at the business to ensure that they are not misleading and actually reflect the value of the property.

Templates of Insurance Agreement Samples

Where To Find Sample Insurance Agreement Templates? You can easily find templates for insurance agreements through a simple internet search. These templates can be in the form of PDF files or editable Word documents. Websites such as LegalZoom or RocketLawyer offer sample insurance agreement templates that are free to download and use. You can also check out resources from the Insurance Information Institute, which has a list of common insurance forms, including insurance contracts and endorsements.
Why Should You Review Sample Insurance Agreement Templates? It is always beneficial to review sample insurance agreement templates before making an agreement. This helps ensure the agreement is legally binding and will protect all parties in case of a dispute. For example, if you are entering into an insurance agreement for a residential property, it would be wise to review sample insurance agreement templates for that type of insurance policy. These templates can help you understand the common exclusions and limits of the insurance policy and what kinds of risks can be covered. Before signing an insurance agreement, you should ensure that both parties agree to the terms and that the agreement is equitable for everyone involved.
When Would Sample Insurance Agreement Templates Come In Handy? You may benefit from sample insurance agreement templates when you are looking to compare different types of insurance policies. This could enhance your chances of getting a better deal. You may also want to look at sample insurance agreement templates if you are unsure about the insurance agreement and want to check how it compares to other agreements.

Legal Aspects of Insurance Agreements

Many states have recognized the protected property right in an insurance contract. That is a right that cannot be destroyed without due process. Baker v. Insurance Company of North America, 96 Wyo. 91, 407 P.2d 357 (Wyo. 1965) (interest of the insured under an insurance policy is a property right, which the insured cannot be deprived of without due process). A breach by an insurer of any terms or conditions of the contract may render it void and create liability in favor of the insured. McDonald v. Hartford Fire Ins. Co., 16 Wash.App. 646, 561 P.2d 230 (Wash.Ct.App. 1977). A breach of an insurance contract may result in a loss of protective coverage to the insured. Milligan v. Insurance Company of North America, 272 S.C. 508, 252 S.E.2d 759 (S.C.Civ.App. 1979); Jeffries v. American Family Mut. Ins. Co., 164 Vt. 536, 671 A.2d 727 (Vt. 1995).
In the event of a breach of an insurance contract, the insured may bring an action for a refund of the premium, even if the insured sustained no damage, or is made worse off as the result of the breach. Egbert v. 21st Century Ins. Co., 150 Cal.App.4th 1020, 59 Cal.Rptr.3d 282 (Cal.Ct.App. 2007). In addition, the insurer may be liable for consequential damages that are naturally flowing from the breach of the insured’s contract rights. Id.; Pinkerton’s Inc. v. Columbia Cas. Ins. Co. , 34 Cal.App.4th 1289, 41 Cal.Rptr.2d 239 (Cal.Ct.App. 1995).
However, the insured’s failure to give timely notice of loss to the insurer can result in a forfeiture of the insured’s contract rights. See Amalfitano v. New York Life Ins. Co., 282 F.Supp.2d 268 (S.D.N.Y. 2003). Oftentimes "legal notice" provisions by the insurance companies within the policy are arbitrarily very short. Because of this, the policy language must be read carefully, evaluating if the insured’s timely notice is required by law. The insurer is required to take reasonable steps to inform the insured of the insured’s right to have legal claims brought against an alleged tort-feasor.
When interpreting conflicting provisions in any insurance policy, the courts will hold that the more extensive or latter provision controls. See Timberjack Distributor, Inc. v. United States Fire Ins. Co. 952 F.Supp. 1277 (D.Minn. 1997). The rules previously mentioned concerning the insured’s duty to provide notice, where the policy is rendered void and unenforceable by the contract, apply unless the insurer has waived this condition; however, there is no requirement that the insured give "notice" of a claim in writing.