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What does Vehicle Insurance Look Like?

What does Vehicle Insurance Look Like

The fine print of a car insurance policy can be a hassle to get to with all the reading. It’s a lot of reading, and it’s easy to get lost in the paragraphs of insurance, financial, and legal jargon. At least your insurance agent is there initially to communicate any important notifications and terms concerning your policy. But they may not always be around when you come across a section of your policy that doesn’t make sense. This post, however, can be accessed anytime and covers everything you’ll need to know about the sections and subsections of your auto insurance policy. This is especially important because your policy is also a legal contract, and you definitely want to know the terms and conditions you signed up for.

The Sections of an Auto Policy

A car insurance policy is composed of the following sections:

  • Car Insurance Declaration
  • Agreement
  • Definitions
  • Insuring Agreement
  • Conditions
  • Coverage Types
  • Coverage Payment Limits
  • Deductibles
  • Exclusions
  • Endorsements and Riders

What is The Car Insurance Declaration Section?

The policy comes as a packet or binder, and the declaration section is usually the very first page. Instead of big walls of text, the information is written boldly and bluntly, so any general information can be gathered within a moment. Most of this information will also be printed on the insurance card you are given.

The information covered includes:

  • **The insurance provider’s official header -**Shows that they are officially insuring it.
  • **Name of the policyholder -**Along with address.
  • Policy number -Unique eight-digit number that works as social security for your insurance.
  • **Policy expiration date -**Usually six months from issuing date.
  • Listed drivers - Drivers covered by insurance.
  • Listed vehicles - Vehicles covered by insurance.
  • Types of coverage issued - Can be collision, comprehensive, etc.
  • Limits of said coverages - The max amount the provider will payout in the event of a specific claim.
  • Deductible amount - How much the policyholder pays in the event of a claim.
  • Annual premium - How much the policyholder pays per year for insurance.
  • Listed endorsements - Lists any insurance riders.

What is The Agreement Section?

As the insured, you have agreed to pay a set premium for your insurance coverage, the amount is stated in this section. This is not a binding agreement; if you stop paying your rates, then your provider will stop giving you coverage.

What is The Definitions Section?

This is the section where things get specific to avoid confusion. Family members, for example, are defined as someone related to the policyholder by biology, marriage, or guardianship. It also may note if they share a home with you.

What is The Insuring Agreement Section?

This is when the insurance company outlines policy specifics and how it will cover the insured. It lists the types of coverage and how much they agree to payout in the event of a claim. It also lists the scenarios where you would not be covered, like using your car for work.

What is The Conditions Section?

Here is where the insurance company outlines the terms and conditions to be a policyholder with them. To file a claim after an automobile accident, you must do so within a set period of time. If you do not file your claim within one year from the time of an accident, it will be lost. You’ll need to provide thorough evidence to support your case, such as a police report. Your claim may be invalidated if you don’t follow through. You may cancel your insurance policy at any time if you do not pay your premiums, but the insurance provider must provide you notice and a reason for cancellation if they want to terminate it.

What is The Coverage Types Section?

The types of coverages your policy has are all included here and can be:

  • Liability coverage - This coverage includes bodily injury and property damage liability. It provides a payout to cover the medical and repair expenses from a car accident you caused. This is required in nearly every stage.
  • Collision coverage - Many people add this coverage for insurance for their own property damage in an accident they cause. If insurance is going to cover the other person’s repairs, they should cover yours too.
  • Comprehensive coverage - Add this with collision coverage, and you have what is known as full coverage, wherein your car is covered from damages both on the road and when not in use.
  • Personal injury protection insurance - Also called PIP, this coverage will help with the medical bills of the policyholder regardless of whether they were at fault.
  • Uninsured motorist coverage - Even though car insurance is required, there are still some that drive without it. If they were to cause you damage or injury, then this coverage would cover you since they are unable to.

What is The Coverage Payment Limits Section?

This section includes the exact amounts your insurance provider will cover after a certain claim. If the payout isn’t enough, you will be on the line for the remaining balance. A common way car insurance companies list their limits is with the 25/50/20 code. The numbers themselves are just examples, but they often are the minimum amount you are required to carry. The 25 refers to the $25,000 in bodily injury coverage, the 50 is the $50,000 of bodily injury per accident coverage, and the 20 is the $20,000 for property damage. Your amounts may be different, but they all cover the same thing.

What is The Deductibles Section?

This is the section that lists the amount you agree to pay in the event of a claim. Let’s say that you set your deductible at $1,200. You would need to pay that amount before your provider steps in. Your deductible also has a direct inverse effect on your premiums -the higher the deductibles, the lower the premiums.

What is The Exclusions Section?

This section simply lists all the circumstances where your insurance will not provide coverage. This includes fraudulent damage, government interference, impaired driving, certain acts of nature, catastrophes, and using your car for business purposes.

What is The Endorsements And Riders Section?

Endorsements and insurance riders are policy add-ons that affect the way coverage is provided. Some examples of endorsements are family protection, waiver of depreciation, and loss of use. A family protection endorsement will increase liability if a driver with no insurance is in an accident with himself or a family member. The waiver of depreciation covers the car for 30% of its lost value it lost after it’s sold. Loss of use enables the usage of a rental car while your car is being repaired.

Tired of high car insurance premiums? Reach out to Insurance Navy today and see how affordable car insurance coverage can be. We offer free quotes online, over the phone at 888-949-6289, and in-person at all our locations. Drop in or contact us today to get started with your quote. Everyone needs car insurance, but not everyone needs to be paying a lot for it.

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