Knowing how to read your car insurane policy is important if you want to make sure you're properly covered after a car accident.
An insurance declaration page is usually the first part of an insurance policy. It declares the basics of who and what is covered and contains the following important terms:
- Coverages: Lists bodily injury and property damage liability, as well as any elected coverages such as comprehensive, collision, etc.
- Named insured: Includes any person specifically designated by name to drive the vehicle. Any driving resident of your household should be listed under “named insured” or “additional drivers” or they might not be covered.
- Policyholder address: The address listed must be that of the policyholder and the primary location at which the vehicle is kept.
- Policy limits/deductible: Lists the maximum amount each coverage will pay as well as any required deductible the policyholder will have to pay out of pocket.
- Policy number: This is your unique policy number, which you’ll need when filing a claim.
- Policy term: Lists the effective date and expiration date of your policy. Don’t wait until your policy period has ended to renew—lapse in coverage can be problematic to any potential claims.
- Premium: The amount you’ll pay over the course of the policy term. Can be listed as a six-month or one-year total.
The insuring agreement goes a bit deeper and provides important details about coverages and obligations.
Knowing what your insurance policy doesn’t cover is just as important as understanding what it does cover. Exclusions differ by state and from one driver to another. Find what’s specifically excluded from your policy by reading the exclusions section.
Finally, most policies have a definitions section, which defines specific terms used in the policy. In order to understand the terms used in the policy, it’s important to read this section.
Reading and understanding your policy is the best way to ensure proper coverage. To obtain a copy of your insurance policy, contact your insurance provider.