How to Read and Understand Your Auto Insurance Policy

When is the last time you sat down to read your auto insurance policy from beginning to end? The mere thought of reading an insurance policy can make your head hurt. Reading your policy helps you verify that the policy meets your needs and that you understand your and the insurance company’s responsibilities if an accident occurs. Many consumers purchase an insurance policy without understanding what is covered, the exclusions that take away coverage, and the conditions that must be met in order for coverage to apply when a loss occurs. Whether you’re looking to read your entire auto policy or are looking for an answer to a specific question, here are some helpful tips to make it less painful:

Read the Declarations Page
If you want to know specifics on the amount of coverages you have, a summary is located in your policy’s Declarations Page. The declarations page is usually found in the first few pages of the policy. It will have information specific to the policy being reviewed, such as: policy effective and cancellation dates; name of insured; the subject of the insurance policy (list of vehicles); premiums charged; policy form numbers and edition dates.

Confirm all Forms and Endorsements are Attached.
Compare the forms and endorsements listed on the declarations page with the forms and endorsements attached to make sure the entire policy is available. This includes confirming the edition dates match.

Read the exclusions.
Exclusions tell you what is not covered by the policy. Most policies start with broad insuring agreements, then whittle away at the coverage with the use of exclusions. Broad exclusions are not necessarily bad. In most liability and special form auto policies, coverage is created when not excluded. It is also important to read the exceptions to the exclusions. Believe it or not, the exceptions sometimes give coverage back in specific amounts.

Pay attention to the conjunctions used in a list.
Pay special attention to the conjunctions used in a list. For example, “And” is usually inclusive and “or” is usually exclusive. If there is a list of five qualifiers, the use of “and” means that all five must be satisfied. “Or” means that if any of the five apply, coverage is granted or excluded depending on the provision being referred to.

Here are Some Common Auto Insurance Policy Terms You Should familiarize Yourself with:

Actual cash value (ACV): When a car is totaled in an accident, the insurance company will pay out the market value of the vehicle. You may be able to purchase a replacement cost value (RCV) policy that reimburses you for the cost of the vehicle when bought new, but those types of policies are more expensive.

Claim: A request made to your insurer to pay for expenses related to damages that qualify under your policy (also known as a “covered” incident), like car repairs or medical expenses; to determine what will be covered, your provider may dispatch a claims adjuster to investigate your claim.

Premium: The amount you pay to have insurance coverage. Your premium costs may be monthly, bi-annually, or annually, depending on the insurer.

Deductible: Like other types of insurance, your deductible is the amount of money you’re required to pay before your insurance takes over; if an accident results in $1,000 in damages, and you have a $500 deductible, you’ll need to pay $500 out of pocket before your insurer pays the remaining $500. As with other types of insurance, higher deductibles mean lower premiums, and vice versa.

Limit: It’s the maximum amount your insurer is willing to pay after you’ve reached your deductible. Once that limit has been reached, the policyholder would be responsible for any further expenses.

Comprehensive Coverage
Comprehensive coverage does not pay for accident-related damages. But it will pay for damages caused by weather, fire, flooding, natural disasters, theft, or coming into contact with an animal crossing the road.

Speak with a Personal Injury Attorney
Reading and understanding your policy can help you avoid problems and disagreements with your insurance company in the event of an accident. Talking with an attorney may make it easier to get the money or other resources they need in order to make a full recovery, or as close to a full recovery as possible. Compensation may be available to help pay, both now and in the future, for lost wages and medical bills that were incurred as a result of the injury. Other amounts may be available depending on state law.

After any type of crash, you should consider talking to a car accident lawyer to learn what your rights and obligations are under the law. Let the personal injury attorneys at Suarez & Montero review the circumstances of your case and discuss your legal options. Our attorneys are ready to provide proven legal representation in pursuing your claim and stand ready to protect your rights.

Contact us today at 786 Lawyers for a FREE consultation!

Jaime Suarez

An experienced legal personal injury defense professional in Miami, who is dedicated to helping accident victims with personal injury cases involving automobile accidents, brain and spinal cord injuries, slip and fall accidents, prescription errors, wrongful death, and accidents at work.