Washington Insurance Council Auto Insurance Auto insurance is not as difficult as you might think. It gets much easier once you know what types are available, how an auto insurance policy is organized, and the coverage amounts and limits that are most appropriate for your particular situation. Parts of an Auto Policy The six basic types of coverages coverages are limited to the amount of coverage purchased as noted on the declarations page of the policy. The common types of auto insurance coverages are: Bodily Injury Liability Provides coverage for injury or death claims made against you in an auto accident and the cost of legal defense. Property Damage Liability Provides coverage for damage to the property of others caused by an auto accident. Medical Payments Pays for medical and hospital expenses and the expense of funeral services resulting from an auto accident, regardless of fault. Uninsured/Underinsured Motorists 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. Collision 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 the remainder. As general rule, the greater your deductible, the lower your premium. Other Than Collision Also known as "comprehensive", it pays for vehicle damages other than those caused by a collision or overturn. This coverage is also available with a deductible. Examples include auto theft, fire, windstorm and flooding. Covered perils are listed in your policy. Be sure to review exclusions. The five basic parts of an insurance policy 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 auto, vehicle identification number (VIN), policy period, policy number, other drivers covered, types of coverages purchased, policy limits and deductibles, premium and additional forms or endorsements. Coverage Parts This part details the coverages purchased. The types of coverage parts usually include: Liability, Medical Payments, Uninsured/Underinsured Motorists, Collision and Other Than Collision. Exclusions This part s 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. 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. Definitions/General Provisions This part includes items such as definitions of terms and miscellaneous conditions regarding the rights of the policyholder and insurance company. Deciding on Appropriate Coverage When determining which coverages and limits of auto insurance you need, consider the following points: Deciding How Much You Need Decide which coverages you need. Here are some points to consider: Your financial responsibility Every driver has a responsibility not only for driving in a safe manner, but also for injuries or damages he or she might cause. Most s have laws which make it important - or even necessary - to have insurance. They require that you file a report if you have an accident involving bodily injury or substantial property damage. You then may be asked to present proof that you can pay damages up to amounts required by law. Your car If you drive an older model, its value might seem low compared to the cost of collision coverage. In this case, you may decide not to buy collision insurance. Your personal finances Collision and comprehensive coverage are available with a deductible. This means that the car owner agrees to pay a specified amount - the first $50, $200 or $500 - of damage to his/her car in each loss and the insurance company agrees to pay the remainder. By eliminating the cost of processing small claims, the company can provide such coverage at a lower price. You must decide whether you prefer full coverage, a small deductible at a higher price, or a higher deductible at a lower price. Now that You're Insured Remember that an insurance policy is a legal contract which defines the duties and responsibilities of both the insurance company and the consumer. It is important for you to have complete confidence in the service to be provided by your insurance company and its representative. Compare costs, quality and coverages and choose the policy that's right for you. You've made an informed decision in selecting your policy. To get the best value for your insurance dollar, you should: Know what kinds of coverages your policy provides. (Ask questions about parts you don't understand.) Report to your insurance representative any change which might affect your premium or coverage. Report accidents or claims promptly and accurately. Keep your car in good repair, drive defensively, obey traffic laws and observe common courtesy and rules of the road. How to Save on Auto Insurance Back to Plan Menu
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