What must be included in a compliant insurance policy for clarity?

A compliant insurance policy must include restrictions and limitations because these elements provide necessary clarity regarding the terms of coverage. By outlining what is covered and what is not, the policy helps policyholders understand the scope of their insurance—a fundamental aspect of transparency in insurance. This clarity ensures that consumers are aware of any exclusions or conditions that could affect their claims or benefits, thereby protecting both the insurer and the insured.

This understanding is crucial in the context of insurance, as policyholders need to be fully informed about any conditions that might affect their coverage in order to make informed decisions. Restrictions and limitations serve to prevent misunderstandings about what the policy entails, ultimately fostering a more transparent relationship between the insurer and the insured.