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Do I need to read my Policy?
Reading an auto insurance policy is no ones idea of fun. After all, an
insurance policy is really a legal contract. It contains a lot of
technical legal language as well as jargon specific to the auto insurance
industry--not exactly afternoon leisure reading. However, it's probably a
good idea to sit down and thoroughly read your policy.
Ideally, you did this when you bought the policy. It only makes sense to read a contract before entering into it so that you're fully aware of your rights and obligations, among other things. If you didn't, you really should read your policy at some point, and then contact your agent or attorney with any questions or concerns. Don't wait until you have a car accident--by then, it may be too late.
What is a "Declaration" page?
Like other insurance contracts, your policy begins with a declaration
page (Dec page). This page identifies the policy number and provides
important information including the policy term, coverage limits, and
information about the insured. If you bought the policy for your car, you
are probably the named insured. If so, the declaration page will contain
your full name, and may also contain the names of family members and other
drivers in your household. Also included here is your complete legal
address, which may differ from the address where the covered auto is
principally kept. The address where the car is kept helps determine your
premium, but it is your legal address to which all correspondence about
the policy will be sent.
If you got a loan to purchase your car and there is still an outstanding balance, the lender will be listed as "loss payee" on the declaration page. Because your lender has a financial interest in your car, they are entitled to receive payment under your auto policy if the car is damaged or destroyed. Consequently, information about your lender must be listed in the "loss payee" section of the declaration page.
The declaration page also contains a description of the vehicle(s) covered under the policy. This description includes each vehicle's year, make, model, serial number, address where garaged, etc. The declarations page also indicates how each vehicle is used (i.e., for pleasure, business purposes, commuting to work, etc.). Your premium will be partly based on this information about your car.
If you elected to purchase one or more "endorsements" to expand and/or restrict the coverage your policy offers, these will be identified on the declaration page by name, form number, and date. The endorsements must be listed here in order for your insurer to provide that particular coverage. The declaration page also shows the annual policy premium (the amount you're paying your insurer for the insurance coverage). The total premium is a figure that results from adding up the separate premiums charged for each specific type of coverage.
What coverage do I need?
Before purchasing auto insurance, you should evaluate and compare the
many products offered to ensure that you get the coverage you need at the
right price. Because your personal and financial obligations change over
time, you may occasionally need to review your personal auto policy to
confirm that it adequately meets your needs. If it doesn't, you may have
to increase or replace your policy.
Why would I want to increase or decrease my current coverage? Before buying new or additional coverage, review the coverage you already have. It's a good idea to sit down with your insurance agent or financial advisor to look over your auto policy. Talk about your current and future insurance needs. You may be able to increase your liability coverage or make limited changes to an existing policy if you find that the coverage you have is inadequate. On the other hand, there may be occasions when you need to purchase an entirely new policy.
The following is a list of some common events that should trigger a review of your personal auto policy:
If you own a car and drive it, going without insurance is generally not an option. In most states, you are required by law to purchase a minimum amount of liability coverage. And you should probably have more than just the bare minimum if you want to provide yourself with adequate protection. There are steps you can take, however, to reduce your auto insurance costs without having to cancel your policy. Some or all of these steps may be appropriate for you, depending on your circumstances.
What should I do about a claim?
If you have had an accident, it may have been a minor fender bender or a
more serious accident resulting in injuries or extensive damage to one or
more cars. Perhaps another motorist was clearly to blame. Regardless of
the severity of the accident or who was at fault, there are a number of
basic steps you'll need to follow once the commotion subsides. You need to
know how to file the claim and deal with your insurance company. This can
be a complicated and stressful process. The more you know, the smoother it
will be and the greater your chances of being happy with the outcome.
The first thing you should do is to promptly phone your insurance company (usually available 24/7) or insurance agent to notify them that you've been in an accident. Do this as soon as possible, even if you're far from home.
You should notify your insurance company of the accident, even if your instincts tell you otherwise. The accident may be minor, so you may not want to take the chance that your premium will go up. However, state laws generally protect you from higher rates unless you caused an accident. So your insurer should always be informed, regardless of the circumstances.
Ask your insurance agent or the company representative what you need to do, and what forms or documents you need to support your claim. Your company may require a "proof of loss" form, as well as medical and auto repair bills, a copy of the police report, and other documents relating to your claim. Supply all the materials and information your insurer needs, and do it in a timely manner.
No one really wants to read an auto insurance policy filled with fine print and insurance jargon. But the days immediately following an accident are probably a good time to look it over. Knowing what your policy covers can prevent unpleasant surprises later on.
In some cases, the insurance will pay the hospital, car mechanic, or other service provider directly. In other cases, you may have to pay these expenses out of your own pocket, and your insurance company will reimburse you for covered expenses. Potential out-of-pocket expenses might include medical and hospital bills, car repair bills, rental car costs, and lost wages. Since you will probably need receipts in order to be reimbursed, it's wise to keep copies of these and other important documents in a safe location.
Don't forget that other types of insurance (i.e., health, homeowner's, etc.) may cover certain losses resulting from an auto accident, depending on the type of loss and other circumstances.