Alabama Insurance Adjuster Practice Exam

In an insurance policy, the summary of what the insurer will do in the event of covered loss is called?

1. Coverage Description

2. Endorsement

3. Insuring Agreement

4. Policy Schedule

The correct answer is: Insuring Agreement

The insuring agreement is a crucial component of an insurance policy. It outlines the specific obligations of the insurer in the event of a covered loss. This section typically details what risks are covered, the extent of coverage, and any conditions that apply. It serves as the foundation of the insurance contract, clearly defining the insurer's responsibilities, ensuring that the insured knows what support and protection they can expect when a claim arises. The other options, while relevant to insurance policies, do not specifically refer to the summary of what the insurer will do. The coverage description generally outlines the specific types of risks covered but may not succinctly encapsulate the insurer's obligations. An endorsement is a modification of the original policy that can add, remove, or alter coverage. The policy schedule is a summary of the policy itself, including key details like coverage limits and deductibles, but does not explain the actions the insurer will take in the event of a loss. Thus, the insuring agreement is the correct term for the described purpose in the question.