South Carolina Personal Lines Practice Exam

Which part of an insurance policy shows the amount of coverage, premium, and policy terms?

1. Insuring agreement

2. Declarations

3. Conditions

4. Exclusions

The correct answer is: Declarations

The declarations section of an insurance policy serves as a summary of the key details related to the insurance coverage. This part specifically outlines essential information such as the amount of coverage provided, the premium that the insured will pay, the effective dates of the policy, and other relevant terms. It essentially identifies the parties involved, the property or risks insured, and the specific limits of coverage. This information is crucial for the policyholder as it gives a clear understanding of what is covered under the policy and the financial responsibilities involved. In contrast, the other parts of the policy, such as the insuring agreement, conditions, and exclusions, serve different purposes: they detail the obligations of both the insurer and insured, specify the conditions that must be met for the policy to respond, and outline what is not covered respectively. Each of these sections is important, but none provide the concise summary of coverage limits, premiums, and terms that the declarations section does.