Insurance 101
Understand limits, deductibles, exclusions, and the parts of a policy before you compare coverage.
Updated October 30, 2026.
General education, not a coverage determination or a promise of savings. Terms, limits, deductibles, exclusions, eligibility and discounts vary by state, carrier and policy. Examples are illustrative. Your issued policy and endorsements control; an agent can help review them. Serving OH, PA, MI, TN, AZ and IN, subject to product availability.
Start with five policy words
Premium: the price you pay to keep the policy in force. Limit: the most the policy will pay for a particular coverage, subject to its terms. Deductible: the part of a covered loss you pay. Exclusion: something the contract leaves out. Endorsement: a change that adds, removes, or revises coverage.
How do I read my policy?
Start with the declarations page: check the people, property, vehicles, dates, limits and deductibles. Then read the coverage forms, definitions, exclusions and endorsements. The declarations page is a useful summary; it is not the entire contract.
Does “full coverage” mean everything is covered?
No. It is an informal phrase, often used for an auto policy with liability, comprehensive and collision. It does not identify your exact limits or promise protection for every driver, vehicle, use or loss. Ask for the specific coverages by name.
What is an exclusion?
An exclusion removes coverage for a cause of loss, property, activity or person described in the policy. An endorsement may change it, but buying an endorsement does not remove every exclusion. For example, personal policies may restrict business use. Ask about delivery work, renting out a home, long vacancies and valuable property before your situation changes.
Replacement cost or actual cash value?
Actual cash value generally accounts for depreciation. Replacement cost coverage may help pay the cost to replace covered property with comparable new property, subject to conditions, limits and any required replacement. Ask how and when payment is made.
Before choosing a policy
Compare the same limits, deductibles, settlement terms and optional coverages. Ask what is excluded and what you would pay yourself.
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Want help applying this to your policy?
Read at your own pace. No form or purchase is required. If you want help, ask a question or request a quote. An online request does not bind or change coverage.