When it comes to insurance policies, the insuring agreement is one of the most important components of the document. Essentially, the insuring agreement is the part of the policy that outlines what specific risks or losses the insurer is agreeing to cover. Without a clear and comprehensive insuring agreement, policyholders may not be fully protected in the event of a loss.
So, what does an example of an insuring agreement in insurance look like? Let’s consider a hypothetical auto insurance policy as an example.
Insuring Agreement: Auto Insurance Policy
In consideration of the payment of premiums and subject to the terms and conditions of this policy, we (the insurer) agree to provide insurance as outlined below:
Coverage for Liability
We will pay damages that the insured (the policyholder) is legally obligated to pay because of bodily injury or property damage caused by an accident arising out of the use of the covered auto as an auto. We will also defend the insured against any suit seeking those damages.
Coverage for Medical Payments
We will pay reasonable medical expenses for bodily injury caused by an accident arising out of the use of a covered auto as an auto. This coverage applies without regard to fault.
Coverage for Uninsured/Underinsured Motorists
We will pay damages that the insured is legally entitled to recover from the owner or operator of an uninsured or underinsured motor vehicle because of bodily injury sustained by the insured caused by an accident arising out of the use of a covered auto. We will also pay damages for bodily injury sustained by an insured caused by a hit-and-run driver.
Coverage for Physical Damage
We will pay for direct and accidental loss to the covered auto or any non-owned auto. The loss must be caused by any of the following:
– collision with another object
– overturn
– glass breakage
– theft
– fire
– explosion
– hail, water, or flood
– vandalism or mischief
– hitting an animal
As you can see from the above example, the insuring agreement in an insurance policy is a crucial component that outlines specific risks and losses that the insurer is agreeing to cover. Policyholders should always carefully review the insuring agreement before signing on the dotted line to ensure they are fully protected in the event of a loss.
