Which of the following is NOT part of the insuring agreement?

• A. Circumstances under which the insured may receive the proceeds of the insurance.
• B. The exclusions.
• C. The perils insured against.
• D. The premium to be paid.

Answer: (D)

The insuring agreement is the insurer’s promise to pay for losses that occur under the policy for covered perils, in exchange for the insured’s premium. It states when a payout will be made and who or what is insured. The amount or terms of the premium, however, belong in a separate premium clause and are not part of that promise. So, the premium to be paid is not part of the insuring agreement. The other elements help define when and what is covered: the circumstances under which proceeds are payable describe the payout triggers, and the perils insured against specify the risks the policy covers. Exclusions simply limit what isn’t covered, but they are still part of the overall policy structure and determine the scope of coverage.