Policy conditions are circumstances under which insurance coverage is provided and excluded in an insurance policy. If an insured experiences a loss due to an excluded peril or one that exceeds the coverage limit, then the insurance company is not responsible for covering the loss or paying beyond the policy limit, respectively. Most policy conditions also include details about start dates, cancellations, and other important information.
Oftentimes, policy conditions can change significantly if a person is willing to pay a higher premium for an insurance product offering more benefits or coverage. For example, a person who buys a health insurance policy with a higher premium may be able to see a number of different specialists and receive various services that other policies offered by the same insurer at a lower premium would not allow for. Insurance contracts are legally binding, and each party is responsible to fulfill its obligations set up by the policy and the policy conditions.