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Feb 24, 2020

Policy Forms And What They Mean

Sponsored Content provided by Alexandra Lysik - Agency Owner, Cavik Insurance

Insurance Agents are always throwing around insurance jargon, from the words “dec page” to “deductible” to “DL123”, but what do these words really mean? What kind of forms do we actually need for quoting and referencing current coverage? A lot of insureds ask me if they can send these forms, but these must be sent by the agent. This month, let’s dive into a short version of our insurance wordings, and make those terms much more understandable.
 
The word “dec page” is actually short for declarations page. A declarations page will outline the policy coverages, such as limits of coverage and any applicable deductibles that you as the insured are responsible for. This page will also provide your policy number, effective dates of the policy, and carrier information. On homeowners policies, the declarations page also shows any listed mortgage companies or additional interests. This is probably the most important piece of documentation to keep on file for any questions, or showing proof of insurance. I would recommend having a folder of your insurance policy declarations pages for reference and if necessary, use for filing a claim.
 
Speaking of deductibles, that’s another tricky one. On automobile policies, the deductible applies to your physical damage coverage, or when your vehicle is damaged and it’s your responsibility to complete repairs. Typically, you will have a deductible for comprehensive coverage and collision coverage. When there is a claim, this amount will be kept out of the final pay out or be due at time of pick up of the repaired vehicle. For homeowners policies, the deductible is what the carrier will keep from your final claim payout estimate. On the coast, there are usually two deductibles; one that applies to all other perils (fire, theft, lightning, water damage, smoke) the other applies to wind/hail damage. Always make sure to check your policy deductibles to make sure they are reasonable and affordable during times of crisis.
 
A DL123, similar to an FS1 form, is a form in North Carolina that the DMV requires as showing proof of active liability insurance. To be specific, the DL123 form provides proof of coverage for a driver; a lot of my clients who are parents of teens ask for this when they take their teens to the driving test. Having on hand before you go is always helpful in moving that process along. For the FS1 form, these request for forms usually come through a letter in the mail from the DMV. This “termination of liability insurance” letter can be rescinded by your agent sending the FS1 form as proof of active insurance. Reasons insureds receive this letter is due to change in carriers, addition or replacement of a vehicle, or changes in policy information.
 
For our commercial clients, the biggest form requested is the certificate of insurance. This form can provide proof of commercial general liability, workers compensation, commercial auto, and many other types of coverages. This form shows the insureds name, the person (listed as certificate holder) requesting the proof of insurance, effective dates, and limits of coverage. The Certificate of insurance (also known as a COI) can also reflect any optional coverages and endorsements that have been added and may be required by the certificate holder. These forms are either generated by the agent or carrier, depending on each carrier guidelines. If you are requesting a COI from a business, make sure the effective dates are in line with the project date needed to ensure current coverage is active.
 
Insurance forms are usually standard, but can have very important information listed. Keeping a record of these forms, if possible, will provide the basic information on your policies. However, if you ever have any questions on either personal or commercial policy forms, reach out to your agent. We are here to help, and can make that “jargon” seem like poetry.
 
Alexandra Lysik is a licensed Property and Casualty Insurance Agent in North Carolina and South Carolina. Her independent insurance agency, Cavik Insurance, helps people save money and receive free insurance reviews to make sure they have the right coverage for auto, home, condo, umbrella, boat and all lines of commercial insurance. For more information visit www.cavikinsurance.com.
 
 
 
 

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