Understanding Your Auto Insurance Policy

Have you ever read your auto insurance policy? Insurance professionals spend years learning to review and analyze coverage. It can take a lot of time and effort to work through all of the provisions. Besides, as a typical policyholder, if you ever managed to read an entire policy, you’d probably find it pretty boring. 

Your auto policy is a contract. Like all formal agreements, the language can be difficult to interpret. Still, if you’ve ever filed an auto claim, you know that it’s important to be familiar with at least the coverage basics. You can begin by getting to know your Declarations Page. 

The Basics 
Your Declarations Page is the first page of your policy, so it’s easy to locate. It’s an overview of coverage that answers the who, where, when and what of your auto policy. The information is so important, it’s the first thing the claim department reviews when you turn in an accident report. 

Who? 
The Policyholder: Your Declarations Page lists you and your spouse as the policyholder/named insured. This should accurately reflect the information you provided when you filled out the insurance application. Insurance companies make underwriting decisions based on the person they are requested to insure. If your policy Declarations Page lists the wrong “who,” it could mean that there’s a mix up or a coverage problem. 

The Policy Number: Insurance companies maintain your underwriting records by a policy number that’s yours alone. That’s particularly important if you must report a claim directly to the company. They’ll need your policy number to verify coverage and set up a claim file. 

Where? 
Policyholder’s Address: Where you live and maintain your cars is an important auto policy underwriting factor. If you live in the city, there are higher risks due to traffic, theft and accidents. If you live in the suburbs, you may have higher commuting mileage. If your declarations page has the wrong address, it’s likely that your coverage and premium have been improperly evaluated. The inaccuracy can cause coverage problems down the road. 

When? 
The Policy Period: Insurance policies provide coverage for a specific period of time, which begins and ends at 12:01 am. If coverage begins on June 1, 2014, 12:01 am and expires at December 1, 2014, 12:01 am, and you didn’t renew your policy, you won’t be covered for an accident that takes place on December 1, 2014 at 12:02 am. 

What? 
Insured Vehicles and Schedule of Coverages: Your Declarations Page lists the year, make, model and serial numbers of the cars for which you requested coverage. Also included are the policy limits for collision, other than collision, bodily injury, property damage, liability or other coverages included on your policy. You’ll also find a listing of any applicable deductibles. Just below the vehicle information you’ll usually find your agents name, the policy form number and a list of any additional endorsements. 

It’s Important to Know Your Personal Auto Insurance Policy 
Your Declarations Page is a good place to begin a basic understanding of your policy. You should review the information as soon as your policy arrives and talk to your agent if it contains any inaccuracies.