How Can I Learn To Read And Understand My Car Insurance Policy?

By Sharon Gibson Posted in Car Insurance News



Reading Your Auto Insurance Policy Can Answer Many Questions

It is very important when buying car insurance that you take the time to carefully read and understand the policy. A car insurance policy is a contract and therefore legally binding. Although the policy may seem long and confusing it is purposefully written to include all necessary information. Most any questions you have about your coverage can be answered by reading through the policy. If after reading through the contract, you still have questions or certain sections are not clear you should ask your agent for a clear explanation.

Auto Insurance Policy Coverage Amounts

A commonly misunderstood aspect of a car insurance policy are the three numbers separated by slashes quoted by the insurer.  These numbers are the maximum coverage amounts in US dollars specified by your policy. A common coverage amount is 100/300/50. These numbers state that your policy covers up to $100,000 of per person bodily injury, $300,000 of total bodily injury, and $50,000 in property damage.

The Five Basic Sections Of A Standard Auto Insurance Policy

Although different company’s policies may be very different, the basic layout of a policy often follows a similar pattern. The first section is usually the declarations and includes information about your vehicle, the names of the drivers on the policy, the premium, and the dates and limitations on the coverage. This section will also have what are called riders, which explain your policy’s specific coverage and additional aspects of your policy such as rental car reimbursement.

Your policy will also include a section that defines and explains terms in the contract to help clarify the language. The conditions section will explain what to do in case of an accident including notifying the police, how to file a claim, and the responsibilities of the motorist. The insuring agreement section clearly outlines your policy type and what coverage you have. Finally all policies will have a section describing the exclusions in the policy. Exclusions are circumstances or situations in which you are not covered under your policy. This last section is often considered the fine print, and it is important that you read it carefully in order to understand exactly when you are and are not covered under your insurance policy.

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  4. How Can I Shop For The Cheapest Ann Arbor Auto Insurance?
  5. How Do I Learn To File A Car Insurance Claim?






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