What is the part of an insurance contract that outlines the covered perils and nature of coverage?

The insuring agreement is a critical section of an insurance contract as it explicitly details the covered perils and the nature of coverage provided by the policy. This area of the contract defines what risks are insured and under what conditions the insurer is obligated to pay claims. It serves as a fundamental component, giving policyholders clarity on what is included in their coverage, thereby establishing the insurer's responsibilities and the protection the policyholder can expect in the event of a loss.

This section also describes the scope of protection that the policy offers, including any specific events or damages that are covered. By clearly articulating these terms, the insuring agreement ensures that both parties have a mutual understanding, reducing the potential for disputes regarding claim settlements.

The other sections of an insurance contract, while important, serve different functions. The declarations provide an overview of the policy, including the named insured and coverage limits. Conditions outline the obligations of both the insurer and the insured, specifying how claims should be reported and managed. Exclusions detail the circumstances or types of damage that are not covered under the policy, which is separate from the core details of what is included in coverage.