Washington State Insurance Practice Exam

What part of an insurance policy describes the covered perils and the method of indemnification?

1. Declarations

2. Insuring Agreement

3. Conditions

4. Exclusions

The correct answer is: Declarations

In an insurance policy, the Declarations section provides information about the specific details of the policy, such as the insured party, the coverage limits, the policy period, and other relevant information. The Insuring Agreement section outlines the promises of the insurance company to provide coverage under specific circumstances. Conditions specify the rights and responsibilities of both the insured and the insurer. Exclusions list the risks or situations that are not covered by the policy. Therefore, the correct answer is Declarations because it describes the covered perils and the method of indemnification in an insurance policy.