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  Parts of an Auto Policy

The six basic types of coverages
All coverage is limited to the amount purchased as noted on the declarations page of the policy.  

The common types of auto insurance coverage are:

  1. Bodily Injury Liability (mandatory)
    Provides coverage for injury or death claims made against you or any driver of your vehicle involved in an auto accident and the cost of legal defense. This protection pays up to the dollar limit you've purchased.
  2. Property Damage Liability (mandatory)
    Provides coverage for damage to the property of others caused by you or any driver of your vehicle. This coverage pays up to the dollar limit you've purchased and the cost of legal defense.
  3. Medical Payments (optional)
    Pays for medical and hospital expenses and the expense of funeral services for all persons injured in your vehicle, regardless of fault. This coverage pays up to the dollar limit you've purchased.
  4. Uninsured/Underinsured Motorists (optional)
    Provides the insured driver(s) and passengers bodily injury coverage, up to the policy limits, for those involved in an accident caused by the owner or operator of an insured vehicle, a "hit-and-run" driver, or when the at-fault driver's policy limits are insufficient to cover losses. Learn more about UIM Coverage.
  5. Collision (optional)
    Regardless of fault, this coverage pays for damages to your car as a result of an accident.  It is available with a deductible, meaning that upon a claim, the car owner pays a specified amount before the insurance company pays for the remaining damages up to the current value of your vehicle.  As a general rule, the greater your deductible, the lower your premium.
  6. Other Than Collision (optional)
    Also known as "comprehensive", it pays for vehicle damages other than those caused by a collision, overturn, depreciation and normal wear and tear.  Examples of what is covered include: auto theft, fire, hail, windstorm, flooding and glass breakage. Covered perils are listed in your policy. Be sure to review exclusions. This coverage is also available with a deductible.

The five basic parts of an insurance policy

  1. Declarations
    This part personalizes the policy and makes it specific to you. It includes such information as name and address, make and model of the automobile, vehicle identification number (VIN), policy period, policy number, other drivers covered, types of coverage purchased, policy limits and deductibles, premium and additional forms or endorsements.
  2. Coverage Parts
    This part details the types of coverage purchased.  These types of coverage parts usually include: Liability, Medical Payments, Uninsured/Underinsured Motorists, Collision and Other Than Collision.
  3. Exclusions
    This part states what is not covered by the policy.  This is a very important part of the policy because it explains the policy's limitations. You can usually purchase coverage for exclusions by purchasing endorsements at an additional premium.
  4. Conditions
    This part outlines the duties and responsibilities of both the insurance company and the policyholder.  It includes premium payment obligations, steps you must take in filing a claim, and disagreement resolution and policy cancellation notice procedures.
  5. Definitions/General Provisions
    This part includes items such as definitions of terms and miscellaneous conditions regarding the rights of the policyholder and insurance company.