Insurance policies contain a ton of information and can often seem overwhelming. Let’s go through it together and breakdown 5 important parts of an insurance policy:


Premium is the cost you pay for your insurance coverage. It is typically paid on a monthly, bi-annual, or annual basis. This amount is paid regardless of if you file a claim or not. If cost is an important factor to you when choosing your insurance, you should focus on this section.


Deductible is the cost you pay out of pocket in the event of a claim prior to your insurance coverage kicking in. For example:

If you have a $500 insurance deductible and you have a claim resulting in $3,500 of damage, you would pay the first $500 and your insurance carrier would pay the additional $3,000*.

A lower deductible typically means a higher premium. Based on your personal financial situation, you will pick a deductible level that makes the most sense for you.

Policy Limits

Policy limits are the max amount of coverage you will get in the event of a loss. For example:

If your home catches fire and it deemed a total loss, this is the max amount of money you would receive. So, if your house is worth $200,000 but your policy limits are maxed out at $150,000, then you could receive a maximum of $150,000.

Similar to deductibles, any changes in your policy limits will change your premium rate. Higher policy limits typically mean higher premiums.


Exclusions are events or types of damage that is not covered by your insurance policy. Depending on your insurance carrier, the type of insurance, and the coverage options selected you may have certain exclusions. For example:

Home insurance typically does not include earthquake and flood coverage. So if you live in an area that experiences earthquakes or floods, you need to find additional insurance coverage to cover those events.

When reviewing your insurance policy or signing up for a new insurance policy, you should review your exclusions closely. It’s important to understand your policy limits and exclusions so that you don’t encounter any surprises later.


Riders are an optional add-on that can increase the coverage or features of your insurance policy. For example:

A typical home insurance policy has a limit of coverage on different types of personal belongings including jewelry, technology, etc. Let’s say your policy limit for technology is $5,000 but you own over $10,000 in technology. You could add a rider to cover the additional $5,000 of technology you own so that in the event of a loss, all of your technology would be covered.

Depending on your insurance policy, there may be a number of different riders you could add. Adding riders to your insurance policy will likely cause the premium of your insurance policy to increase.

Having a better understanding of what you are looking at when you review your insurance policy can help you understand your insurance coverage better. If you are unsure of any part of your insurance policy or don’t understand your coverage, a conversation with your independent insurance agent can help.

To discuss your insurance policy or explore your options today, give us a call at 844-GANNONS.


*Dependent on your policy limits.