| |
Parts
of an Auto Policy
The six basic types of coverages
All coverage is limited to the amount purchased as
noted on the declarations page of the policy.
The common types of auto insurance coverage
are:
- Bodily Injury Liability (mandatory)
Provides coverage for injury or death claims made against
you or any driver of your vehicle involved in an auto accident
and the cost of legal defense. This protection pays up to the
dollar limit you've purchased.
- Property Damage Liability (mandatory)
Provides coverage for damage to the property of others caused
by you or any driver of your vehicle. This coverage pays up
to the dollar limit you've purchased and the cost of legal defense.
- Medical Payments (optional)
Pays for medical and hospital expenses and the expense of
funeral services for all persons injured in your vehicle, regardless
of fault. This coverage pays up to the dollar limit you've purchased.
- Uninsured/Underinsured Motorists
(optional)
Provides the insured driver(s) and passengers bodily injury
coverage, up to the policy limits, for those involved in an
accident caused by the owner or operator of an insured vehicle,
a "hit-and-run" driver, or when the at-fault driver's
policy limits are insufficient to cover losses. Learn more about
UIM Coverage.
- Collision (optional)
Regardless of fault, this coverage pays for damages to your
car as a result of an accident. It is available with a
deductible, meaning that upon a claim, the car owner pays a
specified amount before the insurance company pays for the remaining
damages up to the current value of your vehicle. As a
general rule, the greater your deductible, the lower your premium.
- Other Than Collision
(optional)
Also known as "comprehensive", it pays for vehicle
damages other than those caused by a collision, overturn, depreciation
and normal wear and tear. Examples of what is covered
include: auto theft, fire, hail, windstorm, flooding and glass
breakage. Covered perils are listed in your policy. Be sure
to review exclusions. This coverage is also available with a
deductible.
The five basic parts of an
insurance policy
- Declarations
This part personalizes the policy and makes it specific
to you. It includes such information as name and address, make
and model of the automobile, vehicle identification number (VIN),
policy period, policy number, other drivers covered, types of
coverage purchased, policy limits and deductibles, premium and
additional forms or endorsements.
- Coverage Parts
This part details the types of coverage purchased. These
types of coverage parts usually include: Liability, Medical
Payments, Uninsured/Underinsured Motorists, Collision and Other
Than Collision.
- Exclusions
This part states what is not covered by the policy. This
is a very important part of the policy because it explains the
policy's limitations. You can usually purchase coverage for
exclusions by purchasing endorsements at an additional premium.
- Conditions
This part outlines the duties and responsibilities of both
the insurance company and the policyholder. It includes
premium payment obligations, steps you must take in filing a
claim, and disagreement resolution and policy cancellation notice
procedures.
- Definitions/General Provisions
This part includes items such as definitions of terms and
miscellaneous conditions regarding the rights of the policyholder
and insurance company.
|
