Understanding Your Auto Insurance Policy

Auto insurance isn’t something you buy and forget about, confident that you are a legal motorist and who does everything he or she is supposed to do. Far from it. You should familiarize yourself with your auto insurance policy, before you get into an accident. That way, when faced with the stress of an accident you will not be overwhelmed. Instead, you will be able to make the right decisions even while your vehicle smolders and burns in front of you. Onlookers will admire you even as they cringe in horror at what you face.

The first thing to look at in a document detailing your auto insurance policy - a document of which you should always keep an extra copy in the glove compartment of your vehicle - is part that details your policy’s “conditions.” These are basic instructions, telling you the steps you must take if your vehicle is involved in an accident. Follow these instructions to the letter. Otherwise, you might lose some of your rights as an insurance-bearing motorist.

Then, look at your insurer’s “declarations” page. This should be at the front of the document that explains your policy. This will tell you what kind of coverage you are paying for (e.g. liability, act of God, etc), as well as the maximum amount of money you’re eligible to receive via this coverage. The “declarations” page will show any “extras” that you may have bought to extend your coverage.

If you’re confused by the “declarations” page, read the actual agreement that you have with your insurer. This “insuring agreement” should be somewhere among the pages that follow the “declarations” page. This defines terms such as “liability insurance” and “act of God,” telling you exactly what your insurance policy covers - and, perhaps just as helpfully, what it doesn’t.

Don’t hesitate to call your insurance company if you still don’t fully comprehend your policy. Don’t let an accident catch you by surprise, legally and financially. The law is still the law, and it does not consider ignorance a valid excuse.
If you do get into an accident, put your knowledge of your insurance policy to work. Don’t leave until the police arrive and leave. Talk to the police officer, and take care that they understand what happened, according to you. If you don’t think you’re at fault, for example, make sure the police get that. Get the other motorist’s personal information, including his or her name, address, driver’s license number, and insurance company.

Finally, report the accident to your insurer right away. Almost every US state has laws that prevent insurers from raising your rates simply for having been involved in an accident, unless the accident was your fault. If the accident was, in fact, your fault, it’s even more important to report it to your insurance company, because you may be expected to pay for the damages incurred upon the other driver. Familiarity with your insurance policy makes the whole process as smooth and easy as possible under potentially tragic circumstances, because you will know what to expect to pay, how much money to set aside.