Property and Casualty Insurance Practice Exam

What section of an insurance policy contains details such as the name of the insured and the amount of coverage?

1. Appendix

2. Exclusions

3. Declaration

4. Insuring Agreement

The correct answer is: Declaration

The declaration section of an insurance policy is a critical component that provides essential information about the policyholder and the coverage being provided. This section typically includes the name of the insured, the address, the policy number, and importantly, the amount of coverage being provided under the policy. In this section, specifics such as the types of coverage, the limits of liability, and any deductibles that may apply are also outlined clearly. The declaration serves as a quick reference point for both the insurer and the insured, summarizing the key details of the insurance coverage agreed upon. Other sections, such as exclusions, outline what is not covered under the policy, and the insuring agreement details the scope of coverage and the obligations of both parties in the contract. However, they do not provide the foundational details regarding the insured's identity and specific coverage limits in the way the declaration section does. Thus, the declaration is essential for understanding who is covered and for how much.