How to read your auto insurance policy

Your policy is a legal contract, so at first glance it can seem confusing. But, if you know what to look for and where to find it, your policy becomes a lot easier to understand.

Each auto and homeowners insurance policy has three standard parts:

Declarations Page. Here you’ll find your name, a statement of the policy period during which you are covered and the amount of premium you pay. The declarations page also includes a detailed description of the insurance coverage’s provided and gives the maximum dollar limit the insurer will pay for a claim under each coverage.

Insuring Agreement. This is the heart of the policy. It describes what the insurance company will do in exchange for the premium you’re paying. The insuring agreement states who is covered: The persons named as insured on the declarations page, residents of the same household and persons using the car with the permission of the insured. Everything is spelled out specifically in an attempt to avoid misunderstanding. Read the definitions section and the list of exclusions that apply to each coverage. Its vital that you know what you are covered for and what you are not covered for when you need to use your coverage!

Conditions of the policy. This section describes your responsibilities when you file a claim, for example how much time you have to report it and what documentation you must give to the insurance company. It also explains the policy cancellation terms. You can cancel your policy at anytime, however your insurance provider may only cancel under certain conditions and with advance notice to you