Policy wording is the official document that spells out exactly what your policy covers, what it doesn’t cover and what you should do if you’re going to make a claim. It’s usually part of the Product Disclosure Statement (PDS) and acts like the “fine print” that explains your cover in full detail.
Why is Policy Wording a Big Deal?
Know What You’re Paying For: Reading the policy wording helps you confirm that your policy matches your risks and needs.
Avoid Nasty Surprises: The policy wording lists exclusions clearly so you can avoid assuming something is covered when in reality it’s not.
Understand Your Obligations: By understanding the policy wording, you’ll know your responsibilities (e.g., reporting incidents within a certain period of time) to avoid disputes.
Make Informed Decisions: Reading the wording allows you to compare policies properly and choose one that best fits your situation.
Maximise Your Claims: Knowing the claims process in the policy wording tells you what proof you need and when you should act, speeding things up
Show Transcript
Have you ever signed an insurance policy and thought, "Yeah, yeah, I'll read it later." Well, big mistake. That later moment usually is when you're making a claim, and by then it's too late. A policy wording is basically the rule book of your insurance. It tells you exactly what's covered, what's not, and under what condition. It's where you find the definitions for things like flood, storm, or accidental damage. And believe me, those words can make or break a claim. A lot of people assume something's covered just because it feels like it should be. But insurance doesn't work on feelings. It works on wording. So before you sign, take 15 minutes to read that document. Highlight what you don't understand or ask your broker. Because in insurance, the fine print isn't there to trick you. It's there to teach you how your protection actually works.
What’s in Policy Wording?
Definitions of key terms (e.g., what counts as “flood” or “theft”)
List of what’s covered (insured events)
Exclusions or things your policy never pays for
Your duties such as locking your car, installing smoke alarms, or reporting incidents within 30 days
The claims process and what evidence you need
Limits, sub-limits and excess amounts you pay
How Does It Work in Real Life?
Your Home and Contents Insurance policy might cover storm damage but exclude flood.
A tradie’s Tool Insurance policy may cover theft from a locked van but not if the tools were left on a roof rack overnight.
A café’s Public Liability policy might exclude claims from asbestos in an old building unless you told the insurer about the renovation.
Things People Often Get Wrong
Thinking you’re covered for everything without reading the exclusions.
Assuming the brochure or quote summary is the full story when it almost never is.
Missing the duty to tell the insurer about changes you’ve made or done, like starting to work from home, which can void the policy.
Waiting too long to read the policy wording or only opening it after something goes wrong.
When to Get in Touch with a Broker
If the policy wording feels overwhelming or you’re not 100% sure your cover matches your life or business, a quick chat with a broker can help. An insurance broker can translate the legal language into plain English and spot any gaps.
Unsure About Your Policy Wording?
Confused about your policy wording or want to check what’s covered? Ask away! Tank Insurance can help break it down for you.
