Do you know what your car insurance policy really covers you for? Do you understand what it says and what it doesn’t say? You do not have to become an insurance policy expert, but you should know the basics of your policy and what it does and does not provide for you. There are essentially five different parts of your policy:
- Declarations – Every policy holder has to make declarations, but not all declarations are going to be the same. This is your personal information: your address, your name, the cars you are insuring, their makes and models, their VINs, the policy number, and how long the policy lasts. It also has basic information about your coverage.
- Coverage and insuring agreement – This will basically be what coverage you have purchased, ranging from liability to medical to collision or comprehensive. You will find in this section what your insurance policy does and does not cover, based on the option you chose when buying your policy.
- Exclusions – In this part of your policy, you will find what is not covered in your policy. If you want to find its limitations, this is where you should look. When read in tandem with your coverage and insuring agreement, it should tell you exactly what your policy will not and will cover, in return for what you pay on a monthly basis.
- Conditions – Your policy will likely have some conditions and will tell you how to file a claim and resolve any disagreements you might have with your insurance company. Here is also where you will find your payment obligations.
- Definitions – This might be more correctly called the fine print. This section will talk about what exactly the rights of the insurance company are and what your rights are as the holder of the policy.
On top of all this information, you will probably want to know what exactly your type of coverage will do to protect you, in the event of an accident. Different types of coverage provide different levels of protection, from different kinds of situations. The fewer options you have, the cheaper your coverage will be, but the more options you have, the better protected you’ll be.
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