South Carolina Personal Lines Practice Exam

What document outlines an insurance policy's terms and coverage?

1. Endorsement

2. Declarations page

3. Claims manual

4. Application form

The correct answer is: Declarations page

The declarations page is a crucial component of an insurance policy as it succinctly outlines the essential terms and coverage details. It typically includes information such as the insured's name, the policy number, the coverage limits, the deductibles, the effective dates of coverage, and sometimes the specific risks or perils covered by the policy. This page serves as a summary of the policy and is often the first page of the policy document, making it easy for insured individuals to quickly reference their coverage details and understand their insurance protection. In contrast, other documents mentioned do not fulfill this role. An endorsement modifies the original policy and may add or alter coverage after the policy has been issued but does not detail the policy's foundational terms. A claims manual is primarily for internal use by the insurer to guide claims processing and does not contain policy coverage specifics. An application form is completed by the applicant when seeking insurance coverage and may include information about the applicant's risk profile, but it does not outline the terms of coverage that will be agreed upon once the policy is issued. Thus, the declarations page is the correct choice for summarizing an insurance policy's essential terms and coverage.