How To Read Your Declaration Page From Your Automobile Policy!

November 27th, 2019

This is a guide to help people understand the coverage’s they carry and how they are covered. Each insurance company may present the information in a different way but they all follow the same guideline. If you have any additional questions on your policy, please refer to your auto policy, a licensed agent, or a representative of your insurance agency. A commercial general liability is going to help to secure yourself financially from any motor vehicle accident, the insurance is going to cover all your expenses if the insurance policy gets triggered. This is a great way to protect yourself from any uncalled expense or debt.

-Named Insured: The person on the declaration page. A spouse, if living in the same address, has the same rights as the named insured.

-Policy Period: The effective date of coverage’s.

-Liability – Bodily Injury (BI): This is protection in the event that the named insured is legally responsible for injuring someone because of an auto accident. The number is formatted in one of two ways, split limits and combined single limit. An example of split limit would be 100,000/300,000/50,000 which means 100,000 per person/300,000 per occurrence (the 50,000 is Liability – Property Damage and will be explained later). In the event of an accident or occurrence, the insurance company will only pay up to 100,000 for any individual that is injured (whether it is a pedestrian, people in your car, or people in another car). If four individuals were injured and each required 100,000 for their injuries, the insurance company would only cover the first 3 individuals, the named insured would pay out of pocket for the last individual. Combined single limit will be explained with Liability – Property Damage (PD)

-Liability – Property Damage (PD): This is protection in the event that the named insured is legally responsible for damaging someone’s property because of an auto accident. If the named insured has split limits such as 100,000/300,000/50,000 (first two numbers being Liability – Bodily Injury), the insured would have 50,000 of Liability – Property Damage. This coverage protects in the event that the named insured damages any property inside their auto whether that is someone’s living room, vehicle, or IPod. If a named insured has a combined single limit policy which would be stated as Liability – 500,000 per occurrence, the named insured would be covered for any combination of bodily injury or property damage up to 500,000.

-Medical Payment (med pay): The insurance company will pay anyone occupying the named insured’s car, pedestrians involved in a accident, and other people occupying another car involved in an accident up to the listed amount. This is a pre-payment in the hopes that no lawsuit is filed but does not cover loss due to pain and suffering or lost wages. This acts as a courtesy payment in the event that the named insured is injured.

-UninsuredĀ  amp; Underinsured Motorist (UMĀ  amp; UIM): The named insured is buying coverage for people that do not carry sufficient Liability coverage. An example would be if the named insured is injured for 75,000 due to another individual but the individual only carries 50,000/100,000 coverage, the individual’s insurance company would only pay out 50,000. If the named insured carried 100,000/300,000 UM/UIM coverage, the named insured’s insurance company would pay out the remainder, 25,000 (75,000 damages – 50,000 individual’s coverage). If the individual carried no insurance, the named insured’s insurance company would pay the entire 75,000. The UM/UIM coverage comes in either split limits or combined single limit and depending on the state, property damage coverage might be offered.

-Damage to your Auto: This is coverage in the event that the named insured’s covered auto is damaged and needs to be repaired/replaced. This coverage is optional. It is broken down into two separate categories: collision and other than collision (or comprehensive). Collision covers named insured’s car in the event that it impacts another car or object regardless of fault. Comprehensive covers the named insured’s car in any incident other than collision such as theft or fire. Payout is dependent on whether the policy is an actual cash value, stated value, or agreed value. Both collision and other than collision have separate deductible options.

-General Exclusions: Though each company will have different events in which the named insured will not have coverage, there are several events that all insurance companies share.

– War

– Nuclear war

– Commercial use (taxi or delivery services)

– Illegal acts (gun smuggling)

– Wear and tear (oil change after 5000 miles)

– The auto policy follows the named insured no matter where they are in America or Canada. If a named insured drives another individual’s car, the auto policy with the car listed triumphs. If the named insured is a pedestrian and is involved in an accident with an auto, the auto policy would cover the named insured.

– Depending on the state, the declaration page may contain other categories such as personal injury protection, stacking of limits (stack), and torque to name a few.