Have you ever glanced through an entire car insurance policy? If you have, you know reading and reviewing one can sometimes be a long, boring and arduous process. You want to know the basics rather than plowing through page after page of insurance legalese, but you don’t want to be in the dark either concerning your policy and what it says.
Knowing and understanding the ins and outs of your policy is, however, important, and since a car insurance policy is a legal contract, and spells out the details of a policy, it’s definitely critical to know your coverage and the details of your policy.
Reviewing your Car Insurance Policy
So, how should you review your car insurance policy to gain the most knowledge? Whatever you do, don’t dismiss the details of your policy and other important content. You don’t want to come up short when an accident occurs. You’ll be out in the cold because of neglecting to examine your policy. If any adjustments or changes require clarification, consulting with your insurance agent is a must, but if you want to examine it yourself, there are several important things you’ll want to look for, including the declarations page.
Declaration Page
The first thing you want to do is read and review the declaration page(s) as it’s probably one of the most vital pages of your policy. There may be multiple pages so be sure and look through them all. The page (or pages) declare levels of coverage, driver names, deductions and prices for coverage. If you don’t have your declaration page in front of you, access it online by logging on to your car insurance company’s site and going to your policy.
Other information on the declaration page includes the following:
- Your policy number as well as your home address
- Policy time-frame – dates policy is in effect
- Drivers on the policy who are under the insurance plan
- Your vehicles on the plan along with their VIN numbers (Vehicle Identification number)
- Coverage Schedule – with limits, deductibles and premium cost for each coverage
- With more than one vehicle on a policy, any coverage for it will be listed separately
- Policy discounts – this includes any discounts that you may have received on your policy
- Surcharges – surcharges on your premium will be applied if claims have been made or tickets incurred
Policy Terms- Definitions
Since the legalese of your declaration page or the entire policy may create confusion, there will be a section in your policy entitled Definitions which will define terms or specific words in the policy. It’s an important section as it will define:
- The individuals insured
- The specifics of what is insured
- When those specific entities are insured
Refer to the definitions page whenever there is doubt about the who, what and when of your policy. Any keywords pertaining to those areas will usually be in bold print within the policy. If you don’t understand the words or wording, be sure to consult the definitions page or speak with your insurance agent about difficult wording.
Changes and Renewals to your Policy
When you make changes to your policy, which could mean adding another car or new driver, or removing a car or driver, a new declaration page will be sent to you showing that those changes have been made to your policy. Any time that you make changes to your policy, it’s important that you request the page and that you review it to ensure that everything is as it should be with the changes in place.
Review your Coverage
Along with your declaration page, you’ll want to review the coverage that you are carrying now and whether you want to make any changes. It is necessary to understand your coverage options to determine what is best for your current car insurance needs. The following coverages and levels of coverage are usually part of most any car insurance plan. They include:
Liability
Liability insurance is one coverage that is a requirement in most every state, but its limits vary among states. This insurance coverage pays medical bills, legal judgments, vehicle/property damage or injuries that you or a designated driver cause to another vehicle or person. It is also protects you if you are using another person’s vehicle with their permission. Determination of limits is through bodily injury and property damage. Recommended amounts for coverage are $100,000, $300,000 and $100,000 (100/300/100). Consult with your insurance agent whether you need to increase these amounts.
Collision
Regardless of whether and accident is your fault, collision insurance covers and pays for any damage to your vehicle that occurs with another vehicle and with an object. Deductibles with this kind of coverage run from $250-$1,000. If you go with a higher deductible, your insurance premium will be lower.
Comprehensive
Comprehensive coverage pays for damage to your vehicle through an occurrence other than a car accident. Comprehensive coverage includes:
- Vandalism
- Theft
- Shattered windshields/ other glass damage
- Fire
- Earthquake
- Explosions
- Riots
- Hail
- Windstorms
- Floods
- Falling items (tree branches)
- Animal contact (deer)
As with collision coverage, there is a choice with deductible amounts that range from $100-$1,000.
PIP or Personal Injury Protection
Regardless of who’s at fault in an accident, this protection pays for any medical treatment for a policyholder and passengers who suffer injuries through a car accident. This coverage may also cover work and wages lost and funeral costs. The requirements for this coverage vary by state.
Uninsured and Underinsured Motorist Coverage
This coverage pays for damages if you, another family member or a designated driver are involved in an accident with an uninsured or underinsured driver. Requirements for this coverage depend on the state where you live. You can reject it in states where it is available. Should you waive coverage, the declarations page will show the wording “insured rejects.
Other Factors to Consider
Besides understanding your declarations page, you’ll want to know the details, limitations and intricacies in reviewing your car insurance policy. Your policy is a legal contract after all that requires you to read and review your coverage and the insuring agreement, which is the actual contract over each type of coverage. It governs whether coverage allocation will occur with an accident or related event. Another thing to pay attention to will be the sections of a policy that contain exclusions. Exclusions can have a major effect on claims.
There is much to learn in reviewing your car insurance policy, and you’ll want to avail yourself of help if the review process becomes difficult. Relieve the stress of examining your policy by completing the online contact form. An expert representative will get back to you as quickly as possible with the answers you need to review your policy effectively.