Common Policy Provisions

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Insureds — Named, First Named, Additional

Back

Named Insured: Listed in declarations. First Named: Primary contact with special rights. Additional Insured: Added by endorsement. Example: A landlord is added as an additional insured on a tenant’s renters policy.

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Policy Period

Back

The time frame during which coverage applies. Example: A policy effective from Jan 1 to Dec 31 covers losses occurring within that window.

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Policy Territory

Back

Geographic area where coverage applies. Example: A U.S.-based auto policy excludes coverage for accidents in Mexico unless endorsed.

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Cancellation and Nonrenewal

Back

Rules for terminating or not renewing a policy, including notice requirements. Example: An insurer must give 10 days’ notice for cancellation due to nonpayment.

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Deductibles

Back

The amount the insured must pay before the insurer covers a loss. Example: A $1,000 deductible applies to a $5,000 roof repair, so the insurer pays $4,000.

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Other Insurance

Back

Explains how coverage applies when more than one policy covers the same loss. Example: A homeowners and umbrella policy both cover liability; the umbrella applies excess.

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Nonconcurrency

Back

When two or more policies cover the same risk but have different terms or limits. Example: One policy covers replacement cost, another covers ACV—creating a coverage gap.

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Primary and Excess

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Primary pays first; excess pays after primary limits are exhausted. Example: A business auto policy is primary; the umbrella policy is excess.

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Pro Rata

Back

Each insurer pays a share of the loss based on its proportion of total coverage. Example: Two insurers each cover 50% of a $100,000 building; each pays $50,000 on a total loss.

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Contribution by Equal Shares

Back

Each insurer pays an equal amount until the loss is covered or limits are reached. Example: Three policies each pay $10,000 toward a $30,000 loss.