How to read a declarations page line by line

A declarations page is the front of a policy, usually one or two sheets, and it works as an index. It does not recite the exclusions. It identifies who is insured, which property is covered, which form is attached, the start and end of the term, the most each coverage will pay, the deductibles, and the endorsements that changed the form. Reading it from the top line to the last endorsement, with the booklet beside it, is how the numbers acquire a job. Reading the premium and stopping is how a household memorizes a price and cannot find the limit when a loss happens.

Begin above any dollar figure. The named insured is the person or the people the contract insures by name. A spouse or another family member who lives in the household may be an insured by a definition in the form even when only one name is printed, and a roommate, a trust, or a limited liability company may not be. A wrong name is corrected before a loss, by asking the insurer to endorse the page, not by hoping a later examiner will overlook it. Near the name you will usually see a mailing address, which is where notices go, and a residence premises or location address, which is the property the dwelling coverage follows. On a house you live in, the two addresses often match. On a house you rent out, or one you just bought and have not moved into, they may not. The location address is the one coverage is built around. A loss at a different building does not borrow this page because the mailing address happens to be your home.

The policy number and the term come next. The term has a beginning and an end, often at 12:01 a.m. or a minute after noon, and the form states the clock. A loss on the last calendar day can still fall inside the term. A loss the following day belongs to a renewal or to no policy. If you renewed, keep the declarations page whose dates contain the loss. Last year's page in a kitchen drawer has last year's limits. The form identifier printed in this header is the short code that matters most. HO-3, HO-5, HO-4, and HO-6 are familiar American labels. An HO-3 is a common owner-occupant form, often with broad causes of loss on the dwelling and named causes on contents. An HO-5 often moves contents toward the broader causes. An HO-4 is a renters form. An HO-6 is aimed at a condominium unit owner. The label is not the whole contract. The insurer's edition date, a state amendatory endorsement, and every other endorsement on the list change the booklet. Copy the form number and the edition. When you open the packet, the cover of the form should show the same identifier. A booklet left over from a quote you declined is a different contract, even if the title sounds the same.

Mortgagee and additional-interest lines live in the same upper area. A mortgagee is a lender, and the form gives that lender an interest in certain dwelling payments. A building check may be payable to you and the lender together so the lender can see that the security is repaired. That practice does not hand the lender your contents payment. Contents checks are ordinarily yours. An additional insured or an additional interest has only the status the endorsement describes. A property manager named on the page is a reason to read the endorsement that added the name. The name alone does not make the manager a named insured with the right to the whole policy.

The coverage letters are the middle of the page and the reason the page exists. Coverage A is the dwelling limit, the most the policy pays for covered damage to the dwelling, subject to the settlement clause and the deductible. It is not a market appraisal. A sale price includes land, and rebuilding does not. A limit chosen because it matched a purchase price can sit above or below the cost of construction. If the form contains an insurance-to-value or similar condition, a limit far below replacement cost can reduce the payment on a partial loss as well as on a total one. Coverage B is other structures, such as a detached garage, a fence, or a shed. The limit is often 10 percent of Coverage A, printed either in dollars or as the percent. Convert a percent on the spot. A fence is paid against Coverage B. It does not spend the dwelling limit, and a structure used for business or rented to someone else may be limited or left out by the form.

Coverage C is personal property. On an owner-occupant policy it is often set as a percentage of Coverage A, unless someone changed it to a flat amount. On a renters policy it is the principal limit and it was chosen directly. The figure is a ceiling on covered belongings. Special limits inside the form then reduce particular classes such as cash, jewelry, and business property. Coverage D is loss of use. It addresses additional living expense, or fair rental value if you rented the place out, when a covered loss makes the home unfit to live in. It is often 20 or 30 percent of Coverage A, or a stated dollar amount. It does not duplicate the dwelling limit, and it does not pay the mortgage. The mortgage continues as a debt. Coverage D pays the increase in what it costs to live, up to its own limit, for the period the form defines. A hotel bill that has not been compared with your normal housing cost has not yet been measured as an increase.

Coverage E is personal liability, a round limit such as 100,000 or 300,000 or more. That figure does not repair your roof. Coverage F is medical payments to others, commonly 1,000 to 5,000. The word others is the entire point of the letter. It is not a health plan for the people named at the top of the page. Deductibles sit in a column beside these letters or just below them. There may be a single deductible, or an all-other-perils amount plus a wind, hail, hurricane, or named-storm deductible in dollars or as a percentage of Coverage A. Multiply any percentage by the Coverage A figure on this page, not by a figure from a quote. A deductible you remember from a phone call is irrelevant if this page prints a different one. Circle the wind deductible in dollars and put it where you will find it in the season when roofs fail.

The endorsement schedule is the block readers skip, and it is where this particular contract stopped being a generic form. Each line carries a form number and a short title. Replacement cost on contents, water backup with a dollar limit, scheduled jewelry, ordinance or law, a roof-payment restriction, an animal limitation, a state notice: each title is only a hint. The endorsement is a page in the packet that adds text, deletes text, or replaces a paragraph of the base form. Water backup with a limit of 10,000 is not a statement that flood is covered, and it is not unlimited. An actual-cash-value roof endorsement can leave the rest of the dwelling on replacement cost and change only the roof. If you do not know what a title does, pull that page before you file the packet. A declarations page separated from its endorsements is an index with the revised chapters missing. When a number on the declarations page and a number inside an endorsement seem to disagree, write both figures down and ask the insurer, in writing, which one is in force. Choosing the larger number because it is comforting is not a reading of the contract.

Premium, discounts, and fees occupy the bottom and they are not coverage. A discount for a monitored alarm does not increase the special limit on jewelry. A higher premium than last year does not, by itself, mean any limit increased. If you want to know whether the contract changed, compare each coverage letter and each endorsement title with the prior page. The insurer's legal name on this sheet is the company on the contract. A brand you saw in an advertisement is not a limit and may not even be the issuing company. The policy number is the identifier to put on every letter after a loss, because a name match alone will not find the file.

A first reading takes a pencil and about half an hour, and it helps to walk a made-up page once so the order is familiar. Suppose the sheet names one person, the mailing address matches the location, the term runs from March 14 to the next March 14, and the form is an HO-3. Coverage A is 400,000. Coverage B is printed as 10 percent, which converts to 40,000. Coverage C is 200,000. Coverage D is 80,000. Coverage E is 300,000. Coverage F is 5,000. The deductible for other perils is 1,000. Wind and hail are 2 percent of Coverage A, which is 8,000. A grease fire and a hailstorm are already different amounts of money you would keep. The endorsement list shows replacement cost on contents, water backup at 10,000, and ordinance or law at 40,000. Contents, then, are not settled on actual cash value alone, and a contents claim can have a recoverable-depreciation step. Backup water stops at 10,000 and is not a flood grant. Code-driven work has a ceiling of 40,000 rather than an open promise to meet every new requirement. None of those facts appears in a premium line of 1,840 at the foot of the page.

Number the blocks in the margin as you go: parties, term, form, other interests, A, B, C, D, E, F, deductibles, endorsements, premium. Beside A through D write the dollar limits, with every percent already converted. Beside the deductibles write dollars, including the wind percentage times Coverage A. Beside each endorsement write a few words for what it changed, after you have read the page it points to, not after you have guessed from the title. Then write one sentence the declarations page does not contain. It does not list the exclusions. Those live in the form whose number you copied at the top. Keep that form with the page. Six months later a loss is read against the pair, not against a memory of the conversation in which the policy was purchased.

The desk behind this site is not an insurer, a broker, or a law office. Figures in an example are not your limits. The page that carries your name is the one to mark, and the form number printed on it is the booklet that holds the definitions the page only indexes.

This page is general information. It is not a policy, a diagnosis, a school place, or a trade.