4.12.2012

The Three Basic Sections of Your Auto Insurance Policies

Many people refer to their insurance ID card as their auto insurance policy. Also, other individuals consider that their Policy Declaration Page is their policy. In these two examples and many other scenarios where people may refer to certain documents of their insurance contracts, the description they use is erroneous.

Car Insurance Policy refers to a collection of documents, guides, and printouts that overview the varieties of coverages the insured person has, terms of conditions of the coverage, exclusions, and any extra endorsements.

Insurance Identification (ID) Card: This is a printout that is used as a legal proof of insurance coverage on a particular car. The Insurance ID Card is not the policy. The ID Card is meant to be displayed to law enforcement people to establish existing liability coverage on a particular car. The ID card has to show effective and expiration dates, along with the Vehicle Identification Number of the auto. You do not h ave to have all names of drivers listed on the ID card for the ID card to be intact. Also, the ID Card does not have to exhibit if the policy has non-obligatory coverages such as full coverage.

POLICY DECLARATION PAGES: This is a one or 2 page documents that list certain elements such as:

(1) Insurance compnay's name and address,
(2) The address and name of agent,
(3) Insured's name and address
(4) Effective and expiration dates and time,
(5) Covered vehicles,
(6) Coverage types, and
(7) Liability limits

Again, your declaration page is not your policy, but is part of it.

Among the most important items in the policy declaration is the type and limits of coverage. In Illinois, there are certain minimum coverages and minimum limits that must be complied with. The following are coverage you might find on an Illinois auto insurance policy:
Minimum Mandatory Coverages
A- Bodily Injury Liability Protection: This is a mandatory limit in Illinois. This coverage comes with minimum limit of $20,000 per person, $40,000 per accident.
B- Property Damage: Another mandatory coverage in Illinois with minimum limits of $15,000 per car.
C- Uninsured Motorist Bodily Injury: Also mandatory in Illinois and it provides insurance coverage for the bodily injury of insured person in the event the insured is stricken by someone who turned out to be legally uninsured. The least amounts of coverage in the State of Illinois are $20,000 per person, $40,000 per accident.

Elective Coverage
Underinsured Motorist Bodily Injury. Optional coverage in Illinois, but must be offered in events where liability coverage was written at higher than the minimum limits. In this situation the client can deny this coverage, but in writing.
Uninsured Motorist Property Damage: Covers the insured car only in circums tances where the auto is struck by someone who is legally uninsured. This is not needed if client is purchasing full coverage.
Medical Payments to Others. This coverage delivers for medical and funeral expenditures of the insured people in the event they get involved in an auto accident. The coverage amount varies from zero to $5,000 with nonstandard vehicle insurers, and is offered up to $25,000 with certain preferred car insurance carriers.
Personal Injury Protection: Optional in Illinois but is Required in states that subscribe to the no fault liability system. It provides payments for burial and medical costs up to the limit of the policy in any event of auto related crash, regardless of fault (similar to medical payment.)
Comprehensive & Collision: Although optional, this vehicle is needed if you have a loan on the insured auto. It allows protection in case of a loss to your car because of crashes, theft, water damage, fire, etc.
Towing Coverage: Provides for car towing expense in case your vehicle is involved in a covered loss (mechanical problems are no covered items.)
Substitute Transportation: Provides limited amount of payment (ie $25 per day) for alternative transportation, for a specific number of days(ie 20 days) in the event you suffer a covered loss to your vehicle.
Special Equipment Coverage: Optional in Illinois. It provides coverages for the extra additions that you put in your vehicles (conversions, rims, TVs, etc.)
GAP Insurance: Optional in Illinois. It provides payments for the difference of what the company pays and the amount of outstanding loan on the vehicle (the gap) in the event of total loss.

TERMS AND CONDITIONS: This section lists the definitions and provisions of your policy, your duties and responsibilities and the duties and responsibility of the insurance company. This is one of the most important parts that you need to read in order to get the best use of your policy.

EXCLUSIONS: This section will list issues and instances where there will be no coverage under your policy. Reading this segment very well will help you refrain from lots of heartache when filing a claim in the future.


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