Understanding your car insurance policy documents

• Protect yourself with third party or comprehensive cover
• Use bumper to bumper policies to reduce your liability
• Enjoy facilities like zero depreciation and roadside assistance covers

When it comes to availing a car insurance policy, it’s not just the premium price and the coverage that one needs to look into, but more. It’s always said that policy applicants need to read the fine print of the document, this is because even with regard to the coverage that you will receive following an accident, for damage to the car or person, there are several conditions that you need to be aware of to receive the coverage. To help policy applicants understand exactly what they are paying for, we’ve listed out the policy documents of a car insurance plan. The policy documents are in four sections - the primary insurance policy, the endorsements, the declaration of the policy, and lastly the exclusions of the car insurance policy. Let’s explain all four sections.

The primary insurance policy document

The primary insurance policy document is basically the main policy document that lists out the coverages that will be extended to the policyholder, the third-party liability insurance coverage and comprehensive insurance policy coverage and the add-on covers offered by the insurance company. The policyholder should know that the primary insurance document lists out all the available coverages and add-on covers offered by the insurer and not just the coverages that he/she has opted for. In addition, the primary insurance policy document highlights the conditions based on which a policyholder can make a claim and situations or circumstances under which the insurer can reject the claim. This document also lists out the primary policyholder, the nominee and those who are insured under the policy and the coverage of the policy based on various circumstances.

The endorsements policy document

The second section of the car insurance policy documents is the endorsements section. This part of the policy document is basically the insurance regulations as worded by the state that the policyholder resides in. While the policy document will state the general regulations with regard to making claims and so on, most often the policy document will not be updated or will pertain to the insurance regulations rolled out by the state. For example, if the policy document makes it compulsory for the policyholder to file a claim within 60 days of the accident, the state will probably permit the policyholder 90 days to file the claim - which would not have been updated on the primary policy document. In short, the endorsements section of the policy clearly states the regulations as set by the State in which the policyholders resides. Irrespective of what the primary policy document says, policyholders have to read through the endorsements section to know exactly the nature of the insurance regulations in their State.

The Declarations policy document

The declaration section of the policy document is basically the coverages that are offered to the policyholder by the insurance company. This document describes the type of insurance for a particular type of vehicle, the price of the coverages, the limitations and restrictions of the policy, discounts, and deductibles of the policy that the policyholder has chosen. Usually, the declaration policy document contains the information about the policy as listed-below:

• The type of vehicles that the policy will cover and the name of the insured persons.
• The coverages of the policy that are applicable to different vehicle types.
• Limitations of the car insurance policy.
• The premium or cost of the policy depending on the type of coverage chosen.
• Discounts on the policy premium if possible, surcharges and endorsements if applicable.
• The deductibles under the car insurance policy.

This section of the policy will also contain the voluntary deductible option as well. Here, if the policyholder wishes to reduce the premium of the policy, he/she can opt for the voluntary deductibles. This means that if the policyholder opts for voluntary deductibles amounting to Rs.2,000, and the claim amounts to Rs.5,000, the initial Rs.2,000 will have to be paid by the policyholder and the remaining amount will be settled by the coverage of the policy.

Exclusions policy document

As the name suggests, the last section of the policy document is basically the exclusion list of the car insurance policy. This is basically a list of circumstances under which no coverage from the side of the insurance company will be extended. The exclusion list will be for commercial vehicles, private vehicles, etc. For example, no coverage will be extended if the accident occurs when the policyholder is driving without a valid license or the car has been damaged as a result of radiation, nuclear activity or if the accident occurred due to the policyholder being intoxicated.

The final part of the policy document will be the definition section. If the policyholder fails to understand a few words or definitions, then this section will explain the word or definition in simple English. The policy document will also help one understand if he/she is underinsured and would require an upgrade of their existing policy. Lastly, contact your insurance agent if you have difficulty in understanding certain sections of the policy or the context in which it was worded.