The Insurance Contract

What is auto insurance?

Auto insurance is a contractual agreement between an insurance company and an insured (policyholder). In exchange for a premium, the insurance company promises to provide bodily injury liability coverage, property damage liability coverage and uninsured motorist coverage.

What are the different parts of the auto policy?

The first section of the policy is the "declarations page," which lists what coverages are in effect and the dollar amount of coverage. The next section of the policy includes the actual contract language, which clearly describes the insurance company's rights and responsibilities as well as the policyholders. Your policy may also contain a third section called the endorsement section, which changes or modifies the policy. Certain general provisions are required by law, but policies can be very different. It is important to read any policy issued to you as soon as you receive it. If you have questions, contact your agent or insurance company for clarification.

Who does the auto policy cover?

The auto policy provides coverage to the named insured, spouse and other relatives living in the home as well as anyone to whom the named insured has given permission to operate the vehicle.