{"id":824,"date":"2022-08-16T18:59:00","date_gmt":"2022-08-16T18:59:00","guid":{"rendered":"https:\/\/www.freeway.com\/knowledge-center\/?p=824"},"modified":"2023-09-21T19:35:41","modified_gmt":"2023-09-21T19:35:41","slug":"read-understand-auto-insurance-policy","status":"publish","type":"post","link":"https:\/\/www.freeway.com\/knowledge-center\/auto\/read-understand-auto-insurance-policy\/","title":{"rendered":"How to Read and Understand Your Auto Insurance Policy"},"content":{"rendered":"\n
For those unfamiliar with auto insurance<\/a>, reading and understanding your auto insurance policy may feel like hard work. Even after an agent has walked you through your policy, it can still seem like too many words to bother with reading.<\/p>\n\n\n\n Thankfully, the insurance industry and government regulators have defined common and specific terms so that providers and buyers have a standard way to communicate insurance ideas.<\/p>\n\n\n\n And, there aren\u2019t many terms you\u2019ll need to understand in order to make sense of your types of coverage. Many of those terms can be found in your insurance policy, the document detailing your insurance terms and conditions.<\/p>\n\n\n\n Standard insurance policy terms are common to all policies. We say standard, but there may be some differences between providers. Still, insurance policies are legal contracts and must outline specific requirements common across all providers, so look for these exact terms or something very close.<\/p>\n\n\n\n Your insurance policy will typically be subdivided into a few primary sections. Once you understand these sections, most of the mystery of an insurance policy will disappear, making you better prepared to understand your auto insurance policy protections and become a better insurance shopper<\/a>.<\/p>\n\n\n\n The primary sections of insurance policies include:<\/p>\n\n\n\n Let\u2019s examine these one by one.<\/p>\n\n\n\n An insurance policy\u2019s declaration page is usually its first page. It summarizes the policy details, containing the most useful policy information so that there is no confusion about the auto liability coverages and limits, deductibles, and the policy\u2019s effective dates. This is also some of the same information present on your wallet-sized insurance card, readily available if police should ask for it.<\/p>\n\n\n\n These are the common parts of a declaration page:<\/p>\n\n\n\n What is a Dec Page? \u2013 Office of Public Insurance Counsel<\/a><\/p>\n\n\n\n The Agreement section states that you, as the policyholder, agree to pay a specific premium, displayed on the declaration page, for your insurance coverage types. This is your side of the contract. Note, you are not actually obligated to pay your premium. Anytime you don\u2019t want the coverage, simply stop paying premiums, and your provider will cancel the policy.<\/p>\n\n\n\n Because specific terminology is used throughout your policy with common everyday meanings, the Definitions section spells out exactly what certain words in the context of this policy mean to prevent confusion.<\/p>\n\n\n\n Take \u201cfamily member,\u201d for example. If it is defined in your policy as \u201ca person related to you by blood, marriage or adoption who is a resident of your household,\u201d this means your policy could exclude covering your child living away at college, even though you still consider them family members.<\/p>\n\n\n\n Often right after the declaration page comes the Insuring Agreement. The Insuring Agreement is where the insurance provider explicitly outlines policy details and how it will cover the policyholder. It will start something like: We will pay damages for \u201cbodily injury\u201d (Coverage A) or \u201cproperty damage\u201d (Coverage B) for which any \u201cinsured\u201d becomes legally responsible because of an auto accident.<\/p>\n\n\n\n The policy scope in this section is outlined broadly. Later, your kind of insurance coverage is narrowed down in the exclusions section by outlining the circumstances when your insurance won\u2019t cover you, like driving intoxicated or driving for business.<\/p>\n\n\n\n In the Conditions section, the policy outlines the rules, provisions, obligations, and codes of conduct that the policyholder and insurance provider must follow to maintain the contract\u2019s integrity. If you breach any of these conditions, you could lose your coverage, or your claim could fail.<\/p>\n\n\n\n Common conditions include proper documentation and timely filing of claims. To file a claim, you will need to do so within a specific time limit after the car accident. And when you do file, you will need to have detailed documentation to support your claim, like a police report. Failing to meet these parameters may disqualify your claim.<\/p>\n\n\n\n But not all conditions apply to the policyholder. For example, as a policyholder, you can cancel anytime simply by withholding your premiums; however, if the insurance provider wants to cancel the policy, they will be required to give you forewarning and a reason for cancellation.<\/p>\n\n\n\n Your policy coverages<\/a> are listed out in this section, depending on what you\u2019ve included. The five common car insurance coverage types you will see in this section are Liability, Collision, Comprehensive, Personal Injury Protection (PIP), and Uninsured Motorist Coverage\/Underinsured Motorist Coverage (UMC).<\/p>\n\n\n\n Full coverage refers to collision coverage, comprehensive coverage and liability coverage in one package. Full coverage is often required for complete auto liability coverage from your lender. Optional coverage refers to anything you add to the basic types of coverage, such as non-required medical payments coverage.<\/p>\n\n\n\nWhat are Standard Insurance Policy Terms?<\/h2>\n\n\n\n
Car Insurance Declaration Page<\/h3>\n\n\n\n
The Policy Agreement Section<\/h3>\n\n\n\n
Definitions Section to Dispel Confusion<\/h3>\n\n\n\n
Insuring Agreement Spells Out Insurers Obligations<\/h3>\n\n\n\n
The Conditions Section Outlines the Rules<\/h3>\n\n\n\n
Coverages is the Meat of the Policy<\/h3>\n\n\n\n