What Are Common Policy Declarations?

Common policy declarations are located in a separate section of a property or casualty insurance policy and contain all of the basic information that defines the policy. These declarations include the name of the insured, the amount of coverage and the name, description and location of the item or items being covered.

Common Policy Declarations Explained

Common policy declarations are a basic part of every insurance contract. They also include the dates from which coverage begins and ends, as well as the amount of premium required. The premium that insurance companies charge is based on the information found in the declaration.

Common policy declarations also provide instructions for policy cancellation; making changes in coverages; information on audits, inspections, premiums, and assignment of the policy. The commercial lines policy forms a portfolio created by Insurance Services Office, Inc. (ISO), and takes a modular approach to structuring policies. A commercial lines policy, for example, is made up of a declarations page, the common policy conditions, one or more coverage forms, and endorsements that modify the coverage forms. The common policy conditions form is used with the commercial property, general liability, and crime forms to specify the conditions applicable to the policy.

Common policy declarations are all placed on one page, commonly called the declarations page, to provide a convenient overview of the coverage and conditions of your insurance contract. The policy declarations page is necessary because insurance policies have multiple pages, and filing through them to try to understand the basics of your insurance policy would be extremely time-consuming and complicated. The insurance declarations page simplifies everything by providing a basic overview of an insurance policy (usually) on the first page so everything is clearly outlined along with the costs associated with the coverages listed on the page.

The Importance of Checking Common Policy Declarations

It's important for policyholders to check their common policy declarations because it may show mistakes, like a misspelled name or something more serious, such as, for example, maybe you asked for an open perils policy, but the insurance company accidentally issued a named perils policy. This sort of mistake could pose a huge problem for a policyholder if the mistake remained undetected.

Common policy declarations should include everything a policyholder asked for or agreed to when accepting a new policy. It represents the benefits to what you're entitled. After making sure a policy is correct, it's important to keep the insurance declaration page in a safe place, as it is a key element of the insurance contract.