How to read my Personal Auto Insurance policy?

Most personal auto insurance policies are written with the same form and same basic coverages.  Most individuals struggle to understand the basic question of “How to read my Personal Auto Insurance policy?”  If you are asking this question, it’s a good sign you are getting involved in your insurance purchasing.

The first part to reading your personal auto policy is to understand the coverages.  The second part of reading your policy is to read and understand your declarations page.  Followed by the coverage form itself.

The personal auto policy provides the following four basic coverages:

Part A – Liability Coverage

  • This coverage is for people or property that is injured or damage arising out of the ownership, maintenance or use of a “covered auto”.  An example would be when you get in a vehicle accident and damage another’s car and/or injure them.

Part B – Medical Payments Coverage

  • This coverage is for the medical expenses when you or others are injured while in your vehicle, or when you or a family member are injured as a pedestrian.  This coverage is helpful in the event of personal injury.

Part C – Uninsured Motorists Coverage

  • We have discussed Uninsured & Underinsured Motorist Coverage in greater detail in a separate article, however, this coverage provides a recovery limit for people who are injured by a hit and run driver or when someone is uninsured.

Part D – Coverage for Damage to your Auto

  • This coverage covers physical damage to a covered auto.  There are two categories of damage.
    • Collision – which is when the vehicle damage is result of hitting another vehicle or object
    • Other than Collision – which is all non excluded loss other than collision that cause accidental loss to the covered vehicle.

 Part E – Duties in the event of a claim

Part F- General provisions

  • Here will cover bankruptcy, changes to the policy, fraud, how two or more policies will interact, termination or cancellation wording, etc.

The declarations page:

The declarations page will have a number of important information including your name, the policy number, the policy period, the vehicles covered, the limits, the premiums, and any endorsements.  It is important that you review this information for accuracy at the time of purchase.

The declarations page will have a schedule including the coverage limits above and your selected limit.  It is important to understand the minimum limits required in your state as well as the minimum limits required by your Umbrella policy.

The personal auto policy will then include the agreement wording, exclusions and definitions by coverage part A-D, as well as your responsibilities and general provisions (such as bankruptcy, fraud, termination or cancellation terms, etc).

Although these terms are standard in most policies, these are the areas most people get confused – please comment below or contact us with specific questions.

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Arnold Smith

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