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Do You Understand Your Car Insurance Policy?

Reading through your car insurance policy can sometimes seem confusing and overwhelming. No matter what you do, it will take some time and patience for you to read through your policy and to gain a clear understanding of what is and what is not covered. To help you with reading through and understanding your policy, however, it is beneficial to understand the four major sections in which it will be divided and what you can expect to find in each of those sections.

What is in the Declarations Section?

The declarations section is the first part of the policy and is generally only one or two pages long. This is because the declarations section really serves to provide you with a quick overview of the policy and your basic personal information. Here, you will find information about your vehicle such as its make, model, year, and VIN. The declarations section will also include the names of all of the insured drivers that are in your household as well as if your vehicle is driven primarily for pleasure or for business. An estimate of the number of miles you will drive each day or year will also be included here, as will the limits of your policy coverage. If you borrowed money to obtain your vehicle, the name of the lender will also be on the declarations page. Finally, your declarations section will tell you the effective dates of your policy.

What is In the Insuring Agreement Section?

The insuring agreement section makes up the bulk of your policy, but it can also be the most difficult to understand. This is because the insuring agreement section contains technical terms and goes into a great deal of detail regarding your coverage. Here, you will read exactly what the insurance company will be giving you in exchange for the premium you pay every month.

What is In the Definitions Section?

The definitions section serves to provide you with definitions of the various terms you found in the insuring agreement section. You can refer to this section in order to help you better understand the meaning of these terms and to gain a more thorough understanding of what the insuring agreement section means.

What is the Exclusions Section?

The exclusions section will detail the coverage that you are not receiving through your insurance policy. For example, if you live in an area that is not prone to flooding and you do not have flood insurance coverage, this will be listed in the exclusions section. Be certain to read through this section carefully so you are not caught by surprise if something happens and it is not covered.

What is the Conditions Section?

The conditions section describes the conditions that must be met in order for the policy to remain in effect. For example, if you do not pay the premium as agreed upon, your policy will be cancelled. This section may also contain information about how you should handle a claim and what you should do if you are involved in an accident.

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Shannon Kietzman is a freelance writer and an authority on car insurance issues, including methods for car insurance online. She helps others learn the basics of car insurance so they can make proper and informed decisions when choosing the coverage that is right for them.

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