According to a survey conducted on behalf of Nationwide Insurance in 2013, most insured drivers know more about their favorite television show than about their car insurance policy. Half the respondents to the survey did not know how to file a car insurance claim, one-fifth did not completely understand the details of the policy, and only 40% had ever read the policy.
Your car insurance policy is a legal contract and many people find it confusing and intimidating. Hopefully you will never need to make an insurance claim, but understanding what protections you are buying with the premiums you are paying, is important. You do not want to find out after an accident that you don’t have the coverage you thought you did. Familiarizing yourself with your policy is easier when you break it down into parts.
Learning About Your Car Insurance Policy
- Begin With The Basics
Each policy is divided into three sections:
- The Declarations Page, or dec page, provides you with the basic information about the policy. It has your name, the names of all insured drivers, the policy number, the policy period, and the premium. It also has a summary of each category of insurance coverage along with the maximum amount the insurance company will pay for each category (the policy limits).
- The Insurance Agreement is the main part of the car insurance policy. It describes in detail what types of losses you are covered for, and equally important, what losses are not covered. There is a definitions section and a list of exclusions to make the coverage easier to grasp.
- The Conditions of the Policy provides instructions for how and when to file a claim and explains under what conditions the insurance company can cancel your policy. You can cancel your policy at any time, but an insurance company can only cancel a policy under certain circumstances, and with advanced notice.
- Understand the Categories of Car Insurance Coverage
There are several different types of car insurance coverage within one policy. Some are mandated by law and some are optional. Coverage refers to the types of protection you are buying, and it is easier to comprehend when broken down into parts:
- Bodily Injury Liability (BI) – California requires drivers to have this liability coverage to pay other parties for their injuries in the event you cause an accident and someone is hurt or killed.
- Property Damage Liability (PD) – This category of insurance is also required in California and pays for the damage you cause to someone else’s property, if the accident was your fault.
- Collision – If you cause an accident, this coverage will pay for damages to your car. This protection is not mandatory in California.
- Comprehensive – If your car is stolen or damaged other than in an accident (i.e. rocks on the road damage your car), this is the coverage that will pay for the replacement or repair. This is not required coverage.
- Uninsured/Underinsured Motorist (UM) – In the event a driver who causes an accident either does not have insurance or does not have enough insurance to cover all of your damages, this part of your own policy will pay the shortfall.
- Medical – This pays the medical expense for you and your passengers regardless of who caused the accident.
- Know Your Limits and Deductibles
Each type of coverage has a dollar limit, the maximum amount the insurance company will pay for damages in that category of coverage. You choose what limits you want. The higher the limit, the higher the premium, so you need to weigh the cost of the extra protection provided against the price the insurance company is charging.
Some categories have a deductible, the amount you must pay before your car insurance policy kicks in. You get to choose what the deductible will be. The lower the deductible, the less out-of-pocket you will be after a car accident. However, the lower the deductible the higher the premium.
Contact an Experienced Long Beach Car Accident Attorney to Assist with Your Claim
“Your Injuries are Personal to Me”
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Call the Law Office of Michael D. Waks at 888-394-1174 or use the convenient online contact form to schedule a free consultation. You are under no obligation and you will never pay any money unless you recover damages for your injuries. I offer bilingual services as part of my comprehensive approach to legal representation and I am available 24/7 to talk to you about your case.
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