Understanding your insurance Policy

A policy is the proof that you are insured. It is a contract between the insured person and the insurance company.

Even for motor insurance, the sticker on your windscreen is only proof that you have insurance. The insurance policy is the contract.

Choosing the right policy

We all have different reasons for buying insurance and it is important to first identify the reason. Thereafter, selecting the right policy to address the need becomes easier.

There is a wide range of insurance products offered by insurance companies each with different features, terms and conditions and costs.

It is important to shop around and do some research to find out which products meets your needs and budget.

Make sure you read and understand the terms and conditions and ask questions where you are not sure

Below are some things to consider as you select the insurance policy;

With the answers to these questions, you can select a policy that works for you. Then engage the insurance company, agent or broker. You will be required to fill in forms providing details about yourself and what you want to insure. Be honest as you provide the information so that the insurer can correctly assess the risk and charge the correct premium (do not undervalue or overvalue what is to be insured this presents challenges when a claim arises).

It is important to note that the content in each policy will depend on the type of insurance being taken, for example, a motor vehicle insurance policy and a home insurance policy will cover different issues since what is being covered is obviously different. 

An insurance contract has an average of six sections defined below;


This sets out the parties in the agreement, that is, the insured customer and the insurance company, the policy dates, the policy type and premium payable


This provides description of words that have particular meaning within the context of the insurance cover.


This outlines what the policy does not cover. It is also a way of clarifying what is covered.


This section covers the promises made by the insurer as well as the responsibilities of the insured customer. It covers issues such as dispute resolution, cancellation, claims process and others.


This section of the policy can add coverage, modify coverage or restrict or exclude coverage.

Policy Schedule

This forms part of the policy and is a summary of key information in the insurance policy


The information above is not exhaustive, it is a guide to the elements covered in a policy. It is very critical to go through the policy and don’t be shy to ask questions where you are unsure, after all, you will be making financial contributions towards the policy.