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Understanding Your Car Insurance Policy's Declarations Page
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Article 3 of 11 in Understanding Your Car Insurance Policy
Your auto insurance policy contract can be a confusing document filled with legal language and insurance details that are difficult to understand. It is not uncommon for people to sign car insurance policies without fully understanding all the terms and coverage.
TIP: Regardless of how difficult your auto insurance policy is to understand, it is important to review all the main points that explain your coverage in the event of an accident or injury.
The Declaration Page
The first thing to focus on is typically known as the declaration page, or declaration sheet. The declaration page of an insurance policy is the part of the contract that summarizes your insurance coverage. Your car insurance declaration page will be generated specifically with your car insurance policy in mind, summarizing the policy details.Review your declaration page at once! It is important to review your insurance declaration page carefully so you can be sure that the information accurately reflects the coverage you want. If you find any errors, contact your agent immediately!
TIP: The time to catch and correct errors in your car insurance policy is at the beginning of your coverage period, not after an accident.
Your declaration page will contain important information about your coverage limits for insured vehicles, the insurance premiums for your type of coverage, your dates of coverage, and will provide you with your specific policy number identifying your account. Your declaration page will also identify each vehicle you have insured by the VIN, year, make, model, and body type.
The Declaration Page and Your Coverage Summary
Your declaration page will highlight your:
- Liability coverage for injuries to persons and property
- Uninsured motorist coverage
- Medical payments coverage
- Comprehensive coverage
- Collision coverage
- All risks coverage
- Automobile Death Benefits
Each type of coverage has a premium amount that you pay to get the various coverage limits you sign up for. The higher your coverage limits, the higher your premium will be.
Liability coverage provides specific limits capping the amount your insurance company will pay. The declaration page will typically articulate these limits in three numbers, representing the capped amount your insurance company will pay for injuries per person, per accident, and for property damage caused. For example, your declaration page may identify your liability coverage with the number sequence 100/300/25. This means that for bodily injury, you are covered up to $100,000 per person but up to $300,000 per occurrence (accident), no matter how many people are injured. The third number, 25, is the limit paid for property damage, in this case, $25,000.
TIP: Your state will have minimum liability coverage requirements. Know those requirements before you purchase a policy.
Uninsured Motorist (UM) coverage will also be on your declaration page, and will provide you with limits on how much you are covered for injuries to person or property you suffer when the other driver does not have insurance.
Medical Payments coverage pays any medical bills arising from injuries to you or your passengers, regardless of who is at fault. Typically the medical pay coverage is lower per person, but is not limited by an overall per accident cap, meaning any number of individuals injured in an accident will be covered.
Comprehensive damages coverage covers any expenses required to repair your vehicle after a non-accident causes damage. This type of coverage protects your vehicle from vandalism, broken windows, fire, theft, or any other random event that damages your car. There is typically no limit, but your declaration page will show a deductible you'll have to pay when you file a claim.
Collision coverage protects your vehicle from damage sustained during a collision with anything including another car, a tree, a pole, or a house. Collision coverage will protect you regardless of fault, and also requires a deductible payment per claim.
All Risks coverage refers to insurance for mechanical breakdowns and wear and tear on your vehicle, but not damage from collisions or anything falling under comprehensive coverage. It is not a common coverage to purchase, but if you do the declaration page will indicate your terms.
Automobile Death Benefits coverage will provide payment to your estate should you die in a car accident. There is typically a limit indicated on your declaration page.
Car Insurance Discounts: The declaration page shows any discounts the insurance company will give you including: good driver discounts, multi car discounts, driver training discounts, as well as discounts for certain car features (i.e., Lo Jack, On Star, security and tracking devices).
TIP: You need to carefully review your declaration page to make sure your coverage provided accurately reflects what you discussed and agreed upon when making the purchase.
If you are renewing your car insurance policy, it is just as important to review the insurance declaration page to make sure any changes made are reflected.This page is a critical summary of your coverage, and you should take the time to fully review it before signing and purchasing of any car insurance policy.
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