An insurance policy explains what is covered, what is excluded, what you must do and how valid claims are handled.
An insurance policy is a contract between a policyholder and an insurer. In return for an insurance premium, the insurer agrees to cover certain risks.
The Association of British Insurers explains that insurance works by providing financial protection against agreed events. However, a policy does not cover every possible loss.
Your cover is subject to the policy’s terms, limits, conditions and exclusions. These details can vary between products and insurers.
An insurance policy may include several documents. You should read them together, as each document can contain important information.
The policy wording contains the main terms of the contract. It usually explains:
The insurance schedule sets out details that are specific to you. This may include your name, the insured vehicle or property, the policy dates, cover limits and special terms.
Check the schedule when you receive it. Contact us or the insurer promptly if any details are wrong.
Many general insurance products come with an Insurance Product Information Document, known as an IPID.
The IPID gives a brief summary of the main cover, restrictions, exclusions, customer duties and cancellation terms. However, FCA rules make clear that an IPID does not contain the full contract.
You must also read the full policy wording, schedule and any endorsements.
For motor insurance, you may also receive a certificate of insurance.
Before buying or renewing a policy, check:
The FCA requires firms to give customers appropriate information about a policy in a comprehensible form. This should include relevant benefits, exclusions, limits and conditions. Read the FCA’s rules on policy information.
Do not assume a feature is included because another policy provides it. Cover may differ depending on the insurer and policy.
When applying for consumer insurance, you must take reasonable care not to give the insurer incorrect or incomplete information. This duty is set out in the Consumer Insurance (Disclosure and Representations) Act 2012.
Check your answers, proposal form and statement of facts. Tell us if anything is wrong or unclear.
An incorrect answer does not always have the same outcome. Depending on the circumstances, the insurer may change the terms, reduce a claim payment or treat the policy as if it had not existed.
The Financial Ombudsman Service explains how misrepresentation and non-disclosure disputes are assessed. The outcome will depend on the questions asked, the information given and what the insurer would have done with the correct details.
Your policy may also require you to report certain changes during the policy period. Check the wording to see what must be disclosed.
No. An insurance claim is assessed against the policy terms, limits, conditions and exclusions. The insurer may ask for evidence of the event and the loss.
Insurers must handle claims promptly and fairly. They must not reject claims unreasonably and should pay agreed settlements without avoidable delay. These duties are set out in the FCA’s insurance claims-handling rules.
Consumers usually have a 14-day cooling-off period for many general insurance policies, although exceptions can apply. The FCA explains the right to cancel.
You may also be able to cancel later. Fees may apply, and you may have to pay for the period of cover already provided. Check the policy terms and our terms of business before requesting cancellation.
As an insurance broker, we arrange car, van and home insurance through insurers.
We can help explain the policy documents provided and show you where key information appears. Available cover, price and acceptance will depend on the insurer, the policy and your full details.
The insurer named in your documents provides the insurance. Your policy wording, schedule and endorsements set out the final terms of your cover.
