Understanding your Auto Insurance Policy.
Even if you have a pretty
good understanding about the details of your auto insurance coverage, trying to make sense
of the actual policy document can be different entirely.
In this section:
A Sections on what your
personal auto insurance policy contains
A Brief explanation what
each section contains
The contents of your auto
insurance policy
Your auto
insurance policy is a binding legal contract.
Please read it, it's actually very important to do so.
Your personal auto insurance policy, will have five distinct parts (scroll down or click
to see the definitions):
•
declarations
•
insuring agreement
• definitions
• conditions
•
exclusions
In most personal auto policy documents, some of these parts will be combined. But they'll all be there. Here's what each section means to you, the insured:
Declarations
Declarations
will likely be the first thing in your auto insurance policy, and it's almost always its
own section. Unlike the rest of your policy, it will have been prepared especially for you.
Auto - Car insurance declarations lists all relevant information
about your personal auto insurance policy. This includes:
• year, make, and model of your car
• VIN (vehicle identification number)
• name of the insured (you or you and your spouse)
• dates the policy is effective
• policy's coverage types and limits
• policy's cost (your premium)
Other information is sometimes included (like whether you use the car for business or for
pleasure). And if your car is financed, the lender who holds the lien on the car will be
listed here as the "loss payee". (If the car is "totaled", the lender
needs to be reimbursed.)
Insuring
Agreement
The insuring agreement section is the centerpiece of the personal auto insurance policy. It outlines exactly what the insurance company promises to provide in return for the payment of your premium.
The type and extent of each coverage you've purchased will be described in detail here. The insuring agreement section also will outline who is covered under each provision. It's a long and complicated section, it's probably the most important part of your auto insurance policy.
Definitions
This section is written into the insuring agreement. You can be sure that every relevant term will be narrowly defined, so as to cut down on the possibility of a misunderstanding between the you and the insurance company.
Exclusions
The
exclusions section is an important, it lets you know what, when and who won't be
covered by your policy. The auto insurance policy exclusions section is a list of all
possible circumstances that would possible keep the insurer from the responsibility of
paying your claim.
Example: most auto insurance policies contain an exclusion that exempts the insurer from
having to pay in the case of intentionally caused damage or injury. Make sure you
understand the exclusions, you don't want to be caught relying on coverage that you
don't actually have.
Conditions
The conditions section will become very important should you ever be involved in an accident. It lists your duties and responsibilities as the insured in the event of a claim situation.
The conditions section of an auto
insurance policy normally includes guidelines for contacting the insurance company,
obtaining a police report, and filing a claim. Information on auto insurance policy
cancellation will be outlined here also.
Next: Want help designing your auto insurance? Check out
our guide to choosing
your car insurance and make sure you've got the coverage you need (at the right
price)!
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