Texas General Lines — Property and CasualtyProperty and Casualty Insurance BasicsEasy
An insured's commercial property policy covers damage to their building and contents. The policy states that for a covered loss, the insurer promises to pay for direct physical loss or damage to covered property caused by a covered peril. Which part of the policy structure contains this core promise of coverage?
- AExclusions
- BInsuring Agreement
- CConditions
- DDeclarations
Show answer & explanationAnswer & explanation
Correct answer: B. Insuring Agreement
The Insuring Agreement is the heart of the policy, outlining the insurer's fundamental promise to pay for covered losses and specifying the perils or types of losses covered.
Why the other options are wrong
- A. Exclusions list what is not covered, which is the opposite of the core coverage promise.
- C. Conditions outline duties and obligations, not the fundamental coverage promise.
- D. The Declarations page provides specific policy details, not the core promise of coverage.
Insuring Agreement
The section of an insurance policy that contains the insurer's promise to pay for covered losses and defines the perils or types of losses covered.
- Core promise of coverage
- Outlines what is covered
- Often includes definitions of key terms
Memory trick: Insuring Agreement: I AGREE to cover THIS.