• Gregory Dunlap

Read the fine print: Common Insurance Policy Pitfalls


Whether you are signing a Life Insurance Policy or a Travel Insurance Policy, contracts are a binding agreement in any business. A policy review requires diligence and an eye for detail. Setting expectations, focusing on policy design, and understanding key information helps achieve better outcomes when filing claims.


It is not uncommon for otherwise conscientious people to glance over an insurance contract and sign it without really knowing what it obligates them or the insurance company to do. Consult with a Licensed Insurance Agent before signing any Insurance Policy to make sure your interests are protected.


What should you look for in an Insurance Policy? Here are a few suggestions; your Insurance Agent may have additional advice:

  1. Understand the terms: Insurance is a Federal and State Regulated Financial Service; the Insurance Contract places a guarantee of compensation for specified loss, damage, illness, or death in return for a payment of a premium. However, the Insurance Company has a legal right to dispute the claim's liability for reasons written in the contract or for reasons governed by State and Federal Law.

  2. Identify the parties: All vested parties with a financial interest in the policy must be written into the insurance contract. Policies request the social security number of the beneficiary. Social Security numbers are unique to each individual; this gives the insurer some assurance that the individual making a claim is the actual beneficiary and that no insurance fraud will occur during the claims process.

  3. Complete all blanks: Items left blank can be filled in later by someone else, so be sure to fill them in. It's also good to initial all changes or deletions on any preprinted forms.

  4. Rights and responsibilities: It's important to capture who's responsible for what and who is liable if something doesn't happen according to the insurance policy. Never rely on an oral understanding. Know all of your rights and responsibilities under the policy. Carefully read the entire contract because rights and responsibilities are typically scattered throughout the agreement.

  5. Confidentiality provisions: Insurance Companies must have access to any of your nonpublic personal or protected health information and are bound to secure the information in a commercially reasonable manner consistent with applicable federal and state laws. Personal information can also be considered when filing a claim, such as what you post on social media. Photos of your skydiving might not portray you in the best light if you marked no to the skydiving question in a life insurance application.

  6. Remedies provisions: No one wants to talk about the bad stuff, such as what happens if something goes wrong, but you need to consider these things to put necessary mechanisms in place. Explore ways to limit your liability. Also, determine what types of remedies you need in the event of default by the other party.

  7. Consider your needs: Insurance delivers on the benefits you purchase. If you want coverages for a specific need, such as a travel policy, you can cancel for any reason; you'll have to buy your insurance from a carrier that carries that product. No one insurance company offers an identical product to a competing company. Talk with an Insurance Broker if you want a comparison amongst various companies.

It's also good practice to periodically review existing insurance policies to determine whether they still meet your needs. The same goes for the insurance company; trust your relationship with your carrier and verify that they are performing up to your expectations and contractual obligations.


Due diligence and effective contract management can reduce risk and equate to saving hundreds of thousands of dollars of loss benefits to yourself and your beneficiaries. For more information on annual policy reviews, contact a local independent insurance agent.



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