7.1 Declarations, Insuring Agreement, Conditions, Exclusions

7.1 Declarations, Insuring Agreement, Conditions, Exclusions

Quick Answer: DICE is the order a claims professional or customer service representative (CSR) uses to read a policy: Declarations (who, what, where, when, limits, deductibles, forms), Insuring agreement (the grant; named-perils versus open-perils/all-risks language), Conditions (duties after loss, other insurance, cancellation, assignment, liberalization, concealment or fraud), and Exclusions (take the grant back; some forms add anti-concurrent causation). Walk that sequence to decide whether the insurer is responsible for a loss.

AINS 101 Assignment 6 is policy anatomy. Assignment 4 used DICE as a claims method; this section is the contract itself. The Institutes workplace skill is operational: quickly navigate a policy and determine whether the insurer is responsible for a loss. You will not pass by reciting the acronym. You pass by opening the right page in the right order when a wind-driven rain call hits the desk.

Why DICE order matters

A policy is a contract, not a brochure. Coverage is the net of a grant, minus conditions and exclusions, applied to the people, property, and period on the declarations. Reading exclusions first produces false denials (the exclusion never applied because the grant never reached that property). Reading the insuring agreement without the declarations produces false grants (the caller is not an insured, or the date is outside the policy period). DICE prevents both errors.

Declarations: who, what, where, when, and how much

The declarations (the "dec page") personalize a standardized form. Typical entries:

• Who: named insured(s); sometimes mortgagees, loss payees, or additional insureds listed or scheduled.
• What: described dwelling, auto, or business location; occupancy; construction; covered autos or scheduled items.
• Where: premises address, rating territory, or garage location.
• When: policy period (inception and expiration, often 12:01 a.m. at the described location).
• How much: limits, sublimits, deductibles, coinsurance, premium.
• Which forms: a forms-and-endorsements schedule. If a form is not listed and not attached, it is not in the contract.

If the loss date is outside the period, the person is not an insured, or the damaged building is not the described location, stop. No insuring-agreement sentence can rescue a declarations miss.

Insuring agreement: the grant

The insuring agreement is the insurer's promise. Property forms typically agree to pay for direct physical loss to covered property caused by a covered cause of loss. Liability forms typically agree to pay sums the insured becomes legally obligated to pay as damages because of bodily injury or property damage, and to defend suits seeking those damages.

Two peril vocabularies appear constantly:

• Named-perils (specified perils): the form covers only listed perils—fire, lightning, windstorm, hail, explosion, riot, aircraft, vehicles, smoke, vandalism, theft, falling objects, weight of ice, accidental discharge, and similar lists depending on the form. The insured must show a listed peril caused the loss.
• Open-perils (often marketed as all-risks or "special" causes of loss): the form covers direct physical loss unless an exclusion applies. The insurer must show an exclusion. "All-risks" is a historical label, not a promise that flood, earth movement, or every water loss is covered.

A homeowners HO-3 is the classic split: open-perils on the dwelling, named-perils on personal property. AINS items love that split. Wind-driven rain through a storm-created opening can be a covered dwelling loss on an open-perils building grant and still fail a contents analysis if the personal-property perils list does not reach that water path.

Conditions: the rules of the contract

Conditions do not grant perils. They tell each party what must happen for the grant to be enforceable.

Common property-casualty conditions:

• Duties after loss: prompt notice, protect property from further damage, inventory damaged property, cooperate, submit a sworn proof of loss, and often submit to examination under oath. Failure can prejudice the insurer and jeopardize payment.
• Other insurance: primary/excess or pro-rata sharing so two policies do not overindemnify one loss.
• Cancellation and nonrenewal: who may cancel, required notice, and return premium—subject to state law.
• Assignment: the insured generally cannot transfer the policy without the insurer's consent. After a covered loss, the right to collect for that loss may be assignable; the policy itself remains personal.
• Liberalization: if the insurer broadens coverage during the policy period without charging extra premium, that broadening often applies automatically to this policy.
• Concealment, misrepresentation, or fraud: material dishonesty about the risk or the claim can void coverage. Section 7.3 develops the legal standard.

Exclusions: taking the grant back

Exclusions remove coverage the insuring agreement would otherwise provide. They keep uninsurable or separately priced exposures out of the standard form: flood, nuclear hazard, war, intentional loss, wear and tear, earth movement, and many water losses.

Some property forms use anti-concurrent causation language: if an excluded cause (flood, earth movement) contributes to the loss, the exclusion can bar the claim even if a covered cause (wind) also contributed. That wording is why a hurricane file can pay for wind-stripped roofing and still deny flood-soaked contents. "The wind started it" does not override an anti-concurrent-causation clause.

Endorsements can add, delete, or modify exclusions. Walk DICE on the complete contract: base form plus every attached endorsement listed on the declarations.

Workplace walk: a wind-driven rain claim

A named insured calls: a windstorm peeled shingles; rain then soaked the living-room ceiling and a sofa. The CSR or claims handler walks DICE, not instinct.

The professional answer is not "water is never covered" and not "wind always pays everything." It is a documented DICE result: dwelling repairs may be covered subject to the wind deductible; the sofa depends on the contents perils; flood remains excluded unless a flood policy or endorsement says otherwise.

Policy anatomy on the desk

Think of the packet as layers: declarations on top, insuring agreements and definitions in the jacket, conditions and exclusions in the form body, endorsements at the back. Skip a layer and you will mis-state coverage to a customer—the fastest way to create a complaint file. Section 7.2 adds who "you" is and how endorsements change this anatomy; Section 7.3 adds the legal principles that sit underneath the words.