Texas Property and Casualty License Practice Exam

What do the letters 'DICE' in insurance policy structure stand for?

1. Dedications, Implications, Conditions, Exceptions

2. Declarations, Insuring agreement, Conditions, Exclusions

3. Details, Inclusions, Considerations, Exclusions

4. Declarations, Interest, Clauses, Endorsements

The correct answer is: Declarations, Insuring agreement, Conditions, Exclusions

The letters 'DICE' represent an essential framework for understanding the structure of an insurance policy. The correct interpretation breaks down as follows: - **Declarations**: This section provides essential information about the policy such as the insured party's name, property insured, policy period, and limits of insurance. It sets the stage for the entire contract by defining who and what is covered. - **Insuring Agreement**: This is a critical component of the policy that outlines the insurance company's obligations, detailing what risks are covered and the scope of coverage provided. It essentially states what the insurer is promising to do. - **Conditions**: This part of the policy specifies the duties and responsibilities of both the insurer and the insured. It includes the conditions under which the policy operates and stipulates the actions the insured must take to maintain coverage, like providing timely notice of claims. - **Exclusions**: Exclusions delineate what is not covered by the policy. This section is vital as it clarifies situations or conditions that will not be compensated under the policy, thus helping to prevent misunderstandings between the insurer and the insured. Together, these components provide a comprehensive overview of how an insurance policy functions, allowing both parties to understand their rights and obligations under the agreement