What does an auto insurance policy look like?
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Explanation of the auto insurance policy declarations page: (Click on each description for more information)
Company Name - This is the name of the auto insurance company which entered the insuring agreement or the "policy". Be sure to understand the difference within a brokerage and companies. It is against laws to use the term "insurance company" in a business name unless it is one so if you're buying a policy through a business using the words, services, marketing, or agency, it probably is acting on behalf of another company who's actually entering the agreement.
Policy Number - This number is unique to each policy and helps identify it from the others. Policy numbers can consist of a variation of numbers and letters. The letters are usually in a prefix and are an abbreviation of a company or program. This number changes each term to identify new terms.
Policy Period and Term - This would indicate the effective and expiration dates and times of the current term as well as the length of the term, usually one (month-to-month), three (quarterly), six (semi-annual), twelve (annual) month terms. This does not specify the issue date (original effective date and time of this policy). For original issue date, you would need to request a "letter of experience" from the carrier or general agency.
Insured Information - This is the name and mailing address of the "named insured", "primary insured" or "policy holder" (all mean the same thing) which is the person who applied and signed for the policy. If there are multiple drivers included, they may not appear in the insured info section; instead, they most likely would appear next to the vehicles. The above example does not list any additional drivers. Another section not in the above example is the "excluded driver" section which are those who are definitely not covered.
Vehicle Description - This would list all the vehicles included in the policy along with details such as the year, make, model, sub-model and VIN number. A "vehicle symbol" may be included in this section which is a number assigned to vehicles to indicate a "risk factor". Usually, the higher the symbol, the more premium it may generate. Sometimes if the vehicles do not fit in one page, they print an additional one or may even limit 4-5 vehicles per policy issued.
Garaging Address - Not to be confused with the mailing address which indicates where the correspondence will be mailed, the garaging address indicates where a vehicle is garaged when not being driven. Where an auto is parked may affect the rates. If it has been determined that a certain area has a higher probability of loss, premiums most likely be increased for those residing there.
Coverage and Premium - This is an important part to understand because it indicates what coverage is included and the limits issued. Learn more about coverage to avoid any misunderstandings or assumptions which may lead to the undesirable. The above example shows coverage in dollar amounts; however, many policies will have abbreviated in thousands the limits included. The premium is what you paid for it during the term. If you compare rates, be sure to note the terms so that you complete a proper comparison.
Endorsements - This section would specify if there are any additional attachments to the policy. Common endorsements are "glass breakage" or "exclusions" as well as any other coverage or condition which would not come automatically. Endorsements can include coverage, restrictions, and other things such as special conditions.
Loss Payee - This would list anyone who has a lien on the ownership of the vehicle. The loss payee is one with rights to payment in the event of total loss. It may include a finance company or even someone who owns part of the car. This sections sometimes show additional insured which indicate someone who would have a degree of protection on the event of a loss.
Signature - The signatures of a company's representative(s) acknowledge the conditions of the insuring agreement along with the coverage limitations. The insured signs their signature at the time of the policy purchase. Electronic signatures may also be used in some states for the applications.