Understanding Your Auto Insurance Policy

If you find yourself in an accident, understanding the ins and outs of your auto insurance policy is crucial — regardless of who is at fault. Insurance policies, often complex and rife with jargon, serve as contracts that inform the next steps that insurance companies must take in the event of an accident or under other circumstances. By familiarizing yourself with the different parts of your policy, you can prevent coverage gaps and frustrations ahead of a challenging time, ensuring you’re better prepared for the unforeseen.

How to Read Your Auto Insurance Policy

Your automobile insurance policy is outlined in the documents you received from your insurer. While a personal auto policy consists of two main components, the declarations page and the overall agreement between the policyholder and insurance company, it’s important to become familiar with all of the standard sections of a car insurance policy.

Start with the Declarations Page

The declarations page is a crucial part of your policy, detailing the coverages you have chosen and those you have declined. It provides essential details such as coverage levels, deductibles, named drivers, and costs for each coverage. This page is usually the first one in your policy and is labeled “Your Policy Declarations” or “Declarations Page.”

Many car insurance companies now offer online access to your policy page, making it easy to view — while also being environmentally friendly. The information included on the declarations page covers personal details, insured drivers and vehicles, the coverage schedule, policy period (the dates the policy is active), and any discounts or surcharges. If a coverage type is not listed on the declarations page, it means it’s not included in your policy.

What Are the Other Sections of a Car Policy?

• Insurance Agreement: Specifies the exact terms that you and your insurer have consented to regarding coverage, including the associated terms, conditions, and exclusions.
• Definitions: Clarifies important terms used in the policy.
• Coverage Sections: May elaborate on the specific types of coverage you have acquired, such as liability, collision, comprehensive, and others.
• Exclusions: Lists the specific situations or conditions that are not covered by your policy.
• Endorsements: Details any optional endorsements that you have incorporated into your policy.
• Cancellation Terms: Describes the circumstances under which your policy may be terminated by you or the insurance provider.
• Contact information: Supplies the contact details for your agent and the insurance company for claims, support, or other inquiries.

Understanding Different Types of Car Insurance Coverage

When it comes to protecting yourself and your vehicle, understanding the various types of car insurance coverage is essential. Each type offers different levels of protection, and knowing what’s available can help you choose the right policy for your needs — and anticipate ongoing insurance needs as life happens.

Types of Car Insurance Coverage

• Liability Coverage: Usually required by the law, and covers damages you cause to other people and their property in an accident
• Collision Coverage: Pays for damage to your own vehicle resulting from a collision, regardless of who is at fault
• Comprehensive Coverage: Protects against non-collision-related damages, such as theft, vandalism, or natural disasters
• Personal Injury Protection (PIP): Covers your own medical expenses, and select other benefits, after an accident, regardless of who is at fault
• Uninsured/Underinsured Motorist Coverage: Provides protection if you’re involved in an accident with a driver who lacks sufficient insurance
• Medical Payments Coverage: Covers medical expenses for you and your passengers, regardless of who is at fault
• Gap Insurance: Protects you if your car is totaled and you owe more on your loan than the car’s current value

A Quick Lesson on Car Insurance Liability Limits

Knowing your car insurance liability limits is important, especially if you’re at fault in an accident. If you cause injuries or property damage that exceed these limits, you could be held responsible for the extra costs.

Split Limits Explained

Your liability limits often appear in a split limits format, which shows separate coverage amounts for bodily injury and property damage. For example, if your limits are listed as $250,000/$500,00:

• $250,000: This is the maximum amount your policy will pay for medical expenses for each person injured in an accident.
• $500,000: This is the total amount your policy will pay for all injured parties combined.

So, a policy with these limits means you have $250,000 for each injured person, up to $500,000 total for all injuries.

Combined Single Limits

Some policies use a combined single limit instead of split limits, meaning that there is one overall limit that covers both bodily injury and property damage without separating the two. For example, a combined limit of $500,000 would cover any combination of medical expenses and property damage, but you wouldn’t see specific amounts for each category.

Car Insurance and Personal Injury Claims

Understanding your auto insurance policy is essential to prevent coverage gaps and avoid frustrations in the event of a car accident. As mentioned, this document features things like declarations, insurance agreements, and liability limits, which may include a combined single limit for both bodily injury and property damage. If you’ve been in an accident, contacting our car  accident lawyers in Michigan immediately after a car accident can significantly enhance the chances of building a strong case for compensation.

With over 45 years of experience, our firm is committed to representing car accident victims throughout Michigan. We uphold rigorous standards in litigation, using our extensive knowledge of insurance laws — and a compassionate approach — to guarantee that every victim achieves justice and appropriate compensation. Contact us today.