If you’re new to auto insurance, you’re probably confused by all the terminology, like deductible, liability, etc. So, let’s help you out by explaining the major components of your policy. We’ll start with the declaration page. This is sort of your one-stop shop for information on your car insurance policy. The declaration page gives a summary of the specifics of the policy and is handy to have if you have to talk to your insurance company.
It’s important that you understand the ins and outs of your policy, so read on and use this simple guide to truly understand your protections.
How to Read an Auto Insurance Declaration Page
The declaration page of your auto insurance policy gives you an overview of your coverage. Here are few sections to be aware of and to understand when reading your declaration page.
Policy Period: The dates between which your policy is effective is known as your policy period. Your declaration page should show your policy begin (or effective) date and your policy end (or expiration) date. Most policies have a period of either six months or one year.
Listed Drivers: This section identifies what drivers are included on the policy and may, therefore, use the policy benefits. Be sure to list all drivers of the car. Be sure to also exclude any drivers that should not be covered under the policy.
Covered Vehicles: This section lists the year, make and model of the insured vehicle(s) on the policy. You will also see your VIN number, which can be very handy if you are filing a claim.
Premiums and Coverages: For each vehicle, the coverage amount, and its premium costs are shown. This is a good way to see how much coverage you have on each vehicle. You may not have the same on every car. For instance, you would have higher coverage amounts (along with higher premium payments) for a new car than you would for an old clunker.
Limits: For each coverage type you will also see the limits. For instance, you may have rental coverage, but there may be a per day limit. For liability coverages you will see three amounts separated by a slash, like this: 25/50/15. This indicates (in thousands) how much the company will pay for injuries per person, per incident and how much the company will pay for property damage per incident. In this case, $25,000 per person, up to $50,000 per incident, with a property damage limit of $15,000 per incident.
Deductibles: In the same section you will see your deductibles for some types of coverage. Not all coverage types have deductibles, but for those that do you will see the amount you have to pay when you have an incident. Collision and comprehensive coverage have deductibles. If you choose a high deductible, your monthly payment will be lowered. If you choose a low deductible, your monthly payment will be higher. Be sure to choose an amount you can afford should you have an accident and have to pay your deductible.
Your declaration page can come in handy when it’s time to shop around for car insurance too. Comparing rates for auto insurance is the easiest way to save money. Using your declaration page, you can match coverages and accurately compare quotes from many companies. Just use the InsuranceWins easy online form to get started!
