Associate in Insurance (AINS) 103 Practice Exam

The part of a policy that outlines what the insured must do and the general rules that apply to the coverage is the Conditions section. This part describes the duties of the insured (such as reporting a loss, cooperating with the insurer, providing proof of loss, and paying premiums) and the policy provisions that govern how the policy operates (like cancellation, nonrenewal, changes, subrogation, and assignment). Those duties and rules are what you rely on to understand how the policy will respond after a loss and under various circumstances.

Other sections serve different purposes: the Insuring Agreement states the insurer’s promise to pay for covered losses; the Exclusions section lists perils or situations that aren’t covered; and the Declarations provide basic information about who is insured, what is covered, the limits, and the policy period.