An
Auto Insurance Policy
The policy
you receive from an auto insurance company will have several parts.
- The declarations/information
page includes the policy number, the effective dates,
the details of the cars covered on the policy, the lienholder (if you
have a loan on the car), the coverages, coverage limits, your premium,
risk classifications and any discounts or surcharges. It is also going
to list where the car is garaged and contact details for your company
and agent, if you have one. The coverage names, limits and descriptions
will vary depending on the state.
- The personal
auto policy or policy form. This will be several pages
long and will detail in specific language what is covered, how those
coverages are defined, the conditions of the policy and if there are any
exclusions. This may also include state exception pages that
revise/change/modify the policy form. Some companies customize their
policy forms to match the coverages in a specific policy, while others
list all available coverages. Your declarations/information page details
which coverages were purchased.
- At least one copy of an insurance card should be included as proof of coverage. Keep this in the car.
What
to Look for on a Declarations or Information Page
Go here to
see an example declarations/information page.
1. Personal Information – Verify the address listed on the policy is correct. Parking your car in a
garage, or even parking it off the street can mean lower premiums. Notify
your agent if there has been parking changes since the policy was written.
2. Year, Make, Model,
Vehicle Identification Number (VIN) – How much you pay is
heavily based on the car you drive so make sure this information is accurate.
If your declarations or information page is wrong, it could also cause
problems if you file a claim. Do not get caught by increases when trading in
your car. Call your agent for a quote before you buy.
3. Lienholder
Information– If you obtained a loan to purchase your car, the
lienholder will likely require that it be listed on the policy. If you have
paid off the loan, call your agent to have the lienholder removed. Your agent
or insurance company may ask for a copy of the new title (without the
lienholder listed) or other proof you paid off the loan.
4. Coverages – For an overview of your coverage choices go to InsureUonline.org and click
on your life situation. The auto tab includes explanations of the different
coverages and some tips on evaluating your auto insurance needs. You can also
download the NAIC Consumer's Guide to Auto Insurance here.
5. Collision – The higher your deductible, the lower your premium. However, since this is
the amount you have to pay if the car is damaged in an accident, make sure
you will be comfortable paying the amount.
6. Comprehensive – This is sometimes referred to as "Other Than Collision" coverage.
It is possible that removing the comprehensive and/or collision coverage from
a policy could save some money. Before you decide to cancel comprehensive
coverage weigh the value of the car and the cost to replace or repair it against
what you would save in premium costs.
7. Premium – The amount of premium you are charged generally depends on a number of
factors. You can find out more about the factors your company may use to
determine your premium here. If
you have questions about how your insurer determines your rates and what
steps you can take to improve your risk profile, contact your insurance agent
or insurer.
8. Discounts – When looking at your declarations or information page, you may see
discounts listed at the bottom of the page. Typically, the company has
included any discounts in the premium amount listed. Check the list of
discounts to see what was included in your overall premium. Check here for a
list of discounts typically available. If you think you are eligible for a
discount you are not receiving, review with your insurance agent or insurer.
9. Agent Contact
Details – If you have an agent, their name and contact
information will likely be listed on your policy. You can always contact your
insurance company directly if you have any questions.
Other
Things to Know About Your Auto Insurance
When it
comes to the premium you pay for auto insurance, you should also check.
- Drivers – The individuals listed as drivers on your policy may or may not be
listed on the declarations or information page, but these people can
make a big difference in how much you are paying for insurance. The
driver considered the highest risk by your insurance company will
generally be used to figure your household premium. Review who is listed
as the principal driver on each vehicle to ensure you are correctly
rated.
- Driving record – A speeding ticket or an accident can increase your premium from term
to term. However, after a period of time those violations will fall off
your record. It is a good idea to know what is on your driving record
and how long it might affect your premium. Talk with your agent if you
have a ticket or accident that is several years old.
- Claims history – When you apply for a policy or when a current policy is renewed, it is
normal for an insurance company to check the driver's claims history.
For new customers, companies often run a Comprehensive Loss Underwriting
Exchange (C.L.U.E.), Colossus, or similar report. This information is
used to help determine the cost of insuring your vehicle. Ask your agent
or insurance company how long claims will adversely affect your premium.
- Credit history – In some states, a credit-based insurance score can be used as a factor
to determine your premium. It is a good idea to check your credit report
occasionally to ensure the information is correct. If there is incorrect
information, check with the credit reporting company about how to amend
it and then ask for a review of your premium.
More
information
To make
the best auto insurance choices for you and your family, understand your
options. Call your state insurance department or go here for more information,
August 2011 |
