Reading your auto insurance policy might put you to sleep. It is long, tedious and written in legalese (lawyer talk.) So, most people are not thrilled about having to trudge through the whole policy page-by-page. That is why your policy comes with an Auto Insurance Declaration Page.
It is much shorter, easier-to-read and understand than the rest of the policy pages. It is a summary page (or two) that clearly lays out the protection you get when you pay your insurance premium.
Some insurance companies make it more challenging to understand the declaration page. Instead of labeling each coverage item clearly with titles like collision and comprehensive, they may use numbered codes. If this is the case, ask your agent for help to decode the lists.
Auto Insurance Declaration Page Definition
Your declaration page displays everything for quick and easy access. Auto Insurance Declarations are the front page (or series of pages) of your policy that summarizes basic information like:
- The name of the insured (you)
- Your address
- Your policy number
- The policy period effective dates
- The location of the premises where the vehicle is stored. (Usually your address, but it could be a storage facility or off-site parking garage.)
- All policy limits
- And any other specific information that differs from policy to policy
Most importantly, your declaration page is a succinct summary document from your insurer that outlines the details of your insurance coverage. A short version of your policy, it is a great way to quickly find out the specifics of your coverage. Or see if the insurance company applied a particular discount to your premiums.
Firstly, when you receive your auto insurance policy, verify the information on that front declaration page is right. Commonly, names and addresses are misspelled, but check for other errors, too. Checking right away is critical. It makes sure that after filing a claim, you do not discover you paid for incorrect or incomplete coverage.
Declarations pages are sometimes called “the information page,” and informally, some people, especially agents, call them the “dec” or the “dec page.”
NOTE: Some insurance companies call this page the “declaration” page, while others call it the “declarations” page. Singular or plural, they all mean the same thing.
Auto Insurance Declarations Page Specific Information
Your Auto Insurance Declarations Page also contains more specific information than the basic list above. It also lists:
- The contact information, name and address of the insurance company and their agent
- Vehicles covered under the policy
- Vehicle years makes and models
- Mileage – Current mileage and the anticipated mileage before the policy expires
- V.I.N. (Vehicle Identification Numbers)
- Drivers covered on the policy and any excluded drivers in the household. (For example, teenagers, drivers with less than five years of experience, or drivers with accident histories.)
- Details of the coverage you purchased, including the limits of the coverage in each area.
- Deductibles – The amount you pay in cash out-of-pocket for particular coverage — usually collision and comprehensive — before the insurance kicks in. You pay the first balance (the deductible amount.) And the insurance company pays any amounts over that (to the limit of your coverage.)
- Property damage coverage mandated in all 50 states.
- Bodily injury liability coverage mandated in 49 states and Washington, D.C. (not mandated in Florida.)
- Optional coverage such as:
- Roadside assistance
- Uninsured/underinsured motorist
- Rental reimbursement (Loss of use)
- Notes about your driving record, traffic violations. And the history of both at-fault and no-fault accident claims.
- Your premium payment amounts – annually or monthly. As a lump sum or broken down by the amounts you pay for coverage type.
- Discounts applied to those premiums.
- Endorsements, riders and amendments to clearly outline definitions for additional coverage to expand the basic protection. (For example, a rider on a custom sound system or zero depreciation on a new vehicle.)
- Information about how and where to file a claim.
- Name and address of the lender, called the loss payee, holding a lien against the vehicle. The bank or leasing company where you financed the vehicle.
A Loss Payee
NOTE: A loss payee is your lienholder. This organization has a financial stake in the ownership of your property. For example, when you finance your vehicle, you make payments to your loss payee to buy or lease the vehicle. If your vehicle is damaged, the insurance company writes a check directly to your loss payee up for the amount you owe them. Only after that is paid do you receive any money. If you do not make the payments, a lienholder repossesses your vehicle.
Your insurance policy’s declarations page condenses an overview of the whole insurance policy. It summarizes both your personal information and the coverage details on the policy.
Changes to Your Declarations Page
If you change something that affects your insurance policy, notify your insurance agent. Then they can update your declaration page. For example, if you pay off your vehicle loan or buyout your lease, this might reduce your premiums. So, get a new updated copy that does not list a lienholder. That way, if your vehicle gets damaged, the insurance company writes you a check directly.
When you change your policy coverage, you should also get a new declaration page. For example, if you make a claim and your premiums increase. Or if you add a new driver or buy a new car, you should expect a new copy of the policy and declaration page in the mail.
How to Renew Your Policy
Your declaration page should pinpoint the date your coverage expires. Usually, your insurance agent contacts you to renew the coverage. Every time you renew or change a policy, you get another new declaration page.
Still, it is your responsibility — not your agent’s — to make sure you have insurance coverage. So, as you check over the declaration page, put your policy expiry date on the calendar. And set a reminder for a couple of weeks before that. That way, you keep your vehicle insurance active. And you avoid problems like fines, being towed or a suspended license for not having current insurance.
It is always a good idea to keep your declarations page handy. That way, you can quickly find it when you need questions answered about your auto insurance coverage.
Why is it Important to Understand Your Declarations Page?
It is important to understand your declarations page because:
- it explains what is covered
- what you need to know to make changes to your coverage
- how to cancel the policy
- or to make a claim
Examine this page carefully so you will be prepared when you need the information. Check the different coverage types on your declarations page.
When you take out an auto insurance policy, the insurance agent emails you an insurance binder. This binder becomes your temporary declaration page. Carefully review the pages to confirm the coverage details. And carry it for temporary proof of insurance to register the vehicle or in case of an accident. They also mail a paper copy of the policy, so watch your mailbox in a few business days.
If you cannot find your declaration page when you need it, contact your agent or the insurance carrier. They can send another copy to you.
Confirmation of Insurance Coverage
The declaration page provides an excellent reference. Make sure your policy outlines your coverage accurately. Under a new policy, always review the declaration page to check that everything is what you purchased. When you make a claim, your declaration page will confirm your coverage amounts. If at any time you wonder about the details of your coverage, simply check out your declaration page.
Shopping for a New Policy – Renewal Time
As you shop for new insurance, you need your declaration page handy. It will help assist your search for the best rates and coverage. Your declaration page lets you, and potential new insurance companies, verify current coverage, which makes for easier comparisons. Also, when you change insurance providers, the new company needs proof of the current coverage. An insurance I.D. card is not usually enough. So, you need your declaration page to confirm your current amounts of coverage.
The declaration page is handy for comparing rates. As you request quotes from each insurer, the declaration page makes sure you get the same coverage from each one. It gives you all the details you need to ensure the quotes you get reflect what coverage you need on your auto insurance policy.
Verification for Lender
If you finance a vehicle, your lender likely wants proof of insurance. They do not accept your insurance I.D. card because they need more details about your car insurance policy. They want to see your declarations page. That verifies the vehicle is covered on the policy, coverage details, and it shows the lender is the loss payee. The insurance company usually sends the declaration page directly to the lender. But sometimes you need to provide them a copy.
The auto insurance declaration page helps when you buy a new car. Send a copy to the dealership to let them know you are legally able to drive it. So that way, they let you take it off the lot because every vehicle must have car insurance.
Verification of Discounts on Premiums
Verify your listed discounts. The declaration page remains the only way you know there are no mistakes. When you have questions about the declaration pages, call your agent for help to read and decode it. Complicated paperwork needs deciphering, so make sure you understand it completely.
Different Coverage Types Available on a Standard Auto Insurance Policy
Although the coverage available may differ from state to state, most coverage is quite standard. Be sure to check with your insurance agent to see what coverage is available in your state.
Car insurance deductibles are the amount you pay toward repairs or claims before insurance pays anything to cover the rest. For example, if you are in a car accident that causes $5,000 in damage to your car. With a deductible of $500 on your policy, you pay the first $500 toward the repairs.
Bodily Injury Liability
Bodily injury liability coverage is required by every state except Florida. If you are at fault in an accident where someone is injured, bodily injury liability coverage pays their lost wages and medical expenses that result from their injuries.
Property Damage Liability
Property damage liability coverage helps pay for repairs to damage you cause to vehicles or property that are not your own. It usually covers the costs of damages to another person’s vehicle or property like a fence, building or garage door. Property damage liability coverage does not cover the cost to repair damage to your vehicle. Additional collision coverage repairs your vehicle.
Personal Injury Protection
Personal Injury Protection (P.I.P.) is an extension of your car insurance policy that covers your medical expenses and, usually, lost wages. Referred to as “no-fault” insurance, it pays out claims no matter who caused the accident.
Medical payments, or MedPay, pays for treating injuries that you or any passengers suffer in a motor vehicle accident. This is no-fault insurance, so it pays no matter who caused the accident. Medical Payments insurance also pays for medical treatment if you or any of your family members:
- gets hit by a car on foot
- riding a bike
- or as a passenger in someone else’s car
The coverage is optional and is not available in every state. So, check with your agent to see if it is available to you.
Uninsured Motorist (U.M.) Protection
Uninsured Motorist (U.M.) Protection insurance covers medical expenses from accidents caused by drivers with no insurance. Also called Uninsured Motorist Bodily Injury insurance (U.M.B.I.) U.M. protection also covers you and your passengers if you are injured by a hit-and-run driver.
Underinsured Motorist (UIM)
Underinsured motorist coverage pays for your medical treatment and property damage if the at-fault driver has insufficient insurance to pay. UIM is not required in every state, but it is a good idea because it is not expensive and can make a big difference.
Both UM and UIM insurance coverage is voluntary in over half of the states. In the other half, it is required. So, check with your agent to see if U.M. and UIM are required where you live.
Uninsured Motorist Property Damage (U.M.P.D.)
Uninsured Motorist Property Damage (U.M.P.D.) insurance coverage pays for the damage to your vehicle caused by an uninsured driver. U.M.P.D. could cover your vehicle in a hit-and-run accident. And pay for both your car and some personal property in some states.
Collision Insurance pays for the damage to your vehicle involving a collision with another vehicle. It also covers a collision with any object, like a garage, fence, wall or a tree. When leasing or financing a vehicle, the lender usually requires collision insurance coverage.
Comprehensive insurance covers vehicle repair or replacement for theft, fire, malicious damages like vandalism and any weather-related damage like hail. Your comprehensive insurance pays for any damages, not collision-related.
Rental Reimbursement or Loss of Use
Rental Reimbursement or Loss of Use optional coverage helps pay rental costs while your vehicle undergoes repairs after an accident. You usually keep the rental until your vehicle is on the road again or until you reach the coverage limit. You may be provided with the rental vehicle, or you may have to pay for it up front and get reimbursed.
Roadside assistance helps when your vehicle breaks down. It is optional on most every auto policy. Adding roadside assistance coverage to the policy gets you:
- Towing when the vehicle is not safe to drive.
- Battery jump-starts.
- Flat tire repair or replacement with your spare.
- Fuel delivery if you run out of gas.
- Lockout service to reopen a locked door with a pump wedge or a long reach tool.
- Locksmith service calls a locksmith if the lockout service is unsuccessful. Extra charges may apply.
- Winching and extrication to get your car out if it is stuck.
Other Endorsements Available
Automobile insurance endorsements, or policy riders, are optional additions to your vehicle insurance policy that expands or changes the coverage. For example, transportation expense coverages, cross-state line coverage, and zero depreciation coverage for new vehicles are all popular riders. Ask your agent about which riders are available to you.
Even though a declarations page is relatively comprehensive as a summary of your policy, it may not include optional policies. Check for rental reimbursement and zero depreciation or other specialized riders. If a specific coverage does not appear on the declaration page, assume you have no coverage. Contact the insurance agent immediately to confirm the details and ask for a new declaration page if required.
The Benefits of Higher Coverage Limits and Lower Deductibles
There are laws in every state for specific minimum vehicle insurance limits for each coverage type. Meeting those minimum limits means you are not breaking the law. But they are entirely inadequate when there is a serious accident.
Over 38,000 Americans die each year in accidents on our national roadways. The traffic fatality rate is currently 12.4 deaths for every 100,000 inhabitants. Plus, 4.4 million people need medical attention from getting injured seriously in vehicle accidents every year. Motor vehicle accidents are the leading cause of death in America for people under 55 years old!
- Your chances of getting into an accident? 77%
- How frequently are serious claims made? On average, every 17 years.
Your chance of getting into a motor vehicle accident 1 to 3 times in your lifetime is not based only on your driving skills but also on other drivers. Accidents cause injuries, disabilities, stress, and financial hardships. Saving money by purchasing less insurance is a poor gamble. Consider raising your limits to secure the right protection.
The Problems with Minimum Coverage
Basic liability coverage pays for injury and property damage if you are at fault in an accident. The limits vary state to state but are as low as $10,000 /person and $20,000 /accident in some areas.
If you get into an accident, you will likely be sued. Minimum liability coverage is seldom enough to cover damages. So, you end up paying thousands or tens of thousands out of pocket.
The injured party can even go to court after your assets. You could lose your house! To protect yourself and your family, think carefully about the coverage needed to secure the proper limits.
How Much Insurance Should I Get?
It might be tempting to pay the least possible, but doing so leaves you exposed to financial risk. Generally, you should get more than minimum coverage amounts. Unless you drive an old car with little to no value, and you have no other personal assets, that is.
The higher your coverage limits and the lower your deductibles, the less you pay after an accident claim. Determine how much you could easily afford as you set the coverage limit and deductibles. If you raise your limits and pay a bit more monthly, you get the most out of your insurance policy.
Why Lower Deductibles are a Better Option – Lower Lump Sum Out of Pocket
Premium payments are lower for higher deductible plans, and that could be a good deal. Let’s take a look.
- Car insurance deductibles are the amount you pay out of your pocket to make a claim. It makes people hesitate to make claims, especially for small amounts. For example, if you broke your windshield and it costs $400 to replace it, and your deductible is $250, you pay $250, and the insurance company pays $150. But, if you chip the windshield and it needs a $100 repair, you just pay the whole amount yourself.
- On the other hand, if you have a $1,000 deductible and get into a serious accident with $20,000 in expenses, you pay the first $1,000 of the expenses, and the insurance company covers the other $19,000. If you had a $250 deductible, the insurance company would pay $19,750, and you would only have to pay the $250.
Check the deductible for comprehensive claims and collision claims. They are often different.
Motor vehicle accidents cause a lot of stress, especially if you or a loved one gets hurt. After the accident, many people need time off work to heal physically and emotionally. This is the worst time to have to come up with a large out of pocket deductible payment.
So, when considering high or low deductible amounts, take some time to compare. The difference in the rates may not be much depending on your driving record, and other premium costs. Talk to your agent to see what the actual difference will be in your monthly premiums before you decide.
Why Insurance Companies Do Not Pay the Whole Cost
Deductibles represent sharing the risk between the policyholder (you) and the insurance company. So, the idea is that you are more careful. When you are parallel parking, you pay more attention if you must pay your deductible for repairs to your bumper.
Deductibles only apply to the part of your policy that concerns damage to your own property, the collision and comprehensive coverage. There is no deducible on liability coverage. So, if you damage someone else’s vehicle, your insurance pays the whole bill. Of course, only up to the coverage limits for repairs to the other vehicle. But you have to pay for the deductible, so your car gets repaired.
Deductibles for Those on a Tight Budget
Chances are, someone not on a tight budget will opt for the lower deductibles. Yet, the greatest advantages and peace of mind are for people on a tight budget.
Low car insurance deductibles give you greater peace of mind if you would have trouble with an unexpected extra $1,000 or $500 bill. Especially at a time when you might need some time off work. Play it safe and choose the lowest deductible, often $250. Some insurance companies offer a $0 deductible, depending on your driving and claim record. So, you never pay a penny over your regular premium if your vehicle needs repairs after an accident. Lower deductibles mean you pay more monthly, but there is no panic when something bad happens to your vehicle.
Deductibles for Leased or Financed Vehicles
Also, be sure to choose the lower deductible if you lease or finance your vehicle. Lease and finance agreements often mandate deductibles of $500 or less, so that makes the decision easy.
Understand Your Auto Insurance Declaration Page
Reading an auto insurance policy is not much fun, which is why insurance companies create an Auto Insurance Declaration Page. This short, easy to understand document summarizes the insurance protection you get when you pay your monthly premiums. Save money by understanding how to read your declarations page by comparing coverage when you renew your policy or purchase a new vehicle. Your declaration page is useful, mostly because of its brevity. Be sure you know where yours is so you can quickly answer insurance coverage questions and keep your vehicle insurance renewed on schedule.