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A vehicle insurance policy is a legal contract that binds the insurer to provide certain benefits to the insured under pre-defined circumstances for a specific price or premium. It is important to understand so as to avoid misinterpretations in the event of an accident.

Insurance Policy documents explained:

This is a copy of your insurance that you receive when you purchase the policy. It is a comprehensive document that lists all coverages such as general liability, comprehensive coverage, underinsured motorist, etc. It should be noted that this document lists all possible coverages offered by your insurer, even if you haven’t purchased them.

The insurance policy document clearly defines who the insured is, the conditions that contribute to a valid claim and the circumstances under which the insurance company will not pay for a claim, i.e., exclusions as well as a full explanation of your

A collection of additional documents that you receive along with the insurance policy are attached. The primary policy created by the insurance company will be provided to the insured. Car insurance providers include these additional documents that add certain conditions or remove some from the provisions of the main policy document.

The primary policy and endorsements documents provide a detailed description of all the coverages offered by your insurance company. The declarations page is the one that specifies the coverages that have been purchased by you and the associated restrictions.

  • The name of the insured and the vehicles/property that are covered by the policy
  • Type of coverages that pertain to each vehicle/property under the insurance policy
  • The limitations of each coverage
  • The premium for each coverage
  • Excess Structures
  • Clear indication of what is being charged and how your premium is calculated.

Exclusions section:

Exclusions are scenarios that the car insurance policy does not cover; examples of these are as follows, just to mention a few,

  • Damages caused by a car that was driven without the permission of the owner.
  • Liability for a driver without a valid driver’s license.
  • Driving under the influence of alcohol,etc

In effect, an individual, non-commercial car insurance policy will exclude coverage if the vehicle is used for commercial purposes, business requirements, as a rental vehicle or for any anti-social activities. If a car is to be used for business or commercial purposes, a separate insurance policy needs to be purchased that covers commercial vehicles.

Selecting proper coverages and levels is an important part of getting your car insured. So it is important to read your insurance documentation to understand what is included in it and what isn’t. All policies have a “Definitions” section that clarifies the terms and legal language used in the policy. You can refer to this section to understand terminologies or contact your insurer for further clarifications.