Understanding your automobile insurance policy

Most automobile policies follow a standard form with each part containing specific information.

  1. The declarations include information about the individual purchasing the policy; the dollar amount of the policy; the type, extent and cost of coverage; the date and time coverage begins; your "credit," "insurance" or "risk" rating and the date the policy expires.
  2. The insuring agreement states what losses the policy will cover and provides for your legal defense up to the limits of the policy.
  3. The exclusions state what the policy will not cover. Typical exclusions are:
    • Intentional damage to your own automobile.
    • Damages caused when your automobile is used as a public or delivery vehicle, unless your policy states that it will be used for this purpose.
    • Damages caused while your automobile is being driven by employees of a garage, parking lot or auto sales agency. Read the exclusions carefully. Ask your broker or agent to explain any part that you do not understand.
  4. The conditions list the policy's rules and your duties in case of loss. Usual conditions require you to:
    • Report the loss to your company as soon as possible.
    • Use reasonable care to prevent further damage to your car.
    • Give reasonable cooperation to the company.
    • File proper proof of loss with the company.
    • Forward all documents of lawsuits under your policy to your company.

Failure to meet your responsibilities listed in the conditions may jeopardize any claim you may file. Become familiar with conditions of your policy, and consult it immediately upon incurring any loss. The endorsements are changes in coverage that are added to your insurance policy. Changes are typed on a form called an endorsement, signed by a company official and attached to your policy.

Remember, an insurance policy is a legal contract. Read your policy carefully to make sure you understand all of the provisions. Ask your agent to explain anything you do not understand. If your agent cannot explain the policy to your satisfaction, contact DCI or another agent.