How to read your car insurance policy

Let’s be real — your car insurance policy isn’t exactly a page-turner. There are lots of details, and the language may be difficult to understand at times. But knowing what’s in your policy can make all the difference when life takes an unexpected turn.

At American Family Insurance, we’re here to help. Your local agent is ready to answer your questions and can walk you through your policy, so you feel confident about your coverage. We also want to keep you informed about how your insurance works. Whether you’re a first-time policyholder or just want to brush up on the basics, check out our policy breakdown below to learn more about how you’re protected and when that protection kicks in.

The main parts of your auto policy

Your car insurance policy includes two key sections: a declarations page and the policy form.

The declarations page — also known as the information page — provides a concise summary of your policy. It’s where you can see all the important details of your coverage at a glance.

The policy form — sometimes called a coverage form — is the fine-print section of your policy. It is a legal document containing all the terms and conditions of your coverage.

Let’s take a closer look at what’s included in these two important parts of your policy.

Note: Some of your policies or endorsements will have forms that dive into the specifics of your coverage. The numbers on those forms may appear on your declarations page as reference points. Your agent will be happy to provide further explanation.

What to know about your declarations page

Your declarations page provides a quick snapshot of your auto insurance policy. It summarizes your coverages, policy limits, and deductible amounts. It also notes any active discounts and relevant policy or endorsement forms.

Here’s what to look for:

Named insured on the policy

At the top of the page, you’ll see the name and address of at least one named insured — these are the policyholders. The first person named is the primary named insured; if a second person is listed, they are the secondary named insured. Additional named insureds can be added as outlined below.

Additional insured

If you have a loan on the vehicle, your lender may be listed here as a loss payee or additional insured.

Drivers on the policy

All drivers covered under the auto policy are identified on your declarations page.

Vehicles covered

You’ll see the year, make, model number, and VIN for all insured vehicles under your policy.

Policy period

This section includes the effective date, or date the policy started, as well as the termination date when the policy expires — unless it is renewed.

Coverage

Here’s where you can see how much coverage you’ll have for each type of claim. These are the financial details of the agreement between you and your insurance company. You’ll also find information on your premium and the cost of coverage.

Limits

The limits section covers the maximum payout for things like bodily injury or property damage. Often these numbers are displayed as a series — such as 100/300/100 — that defines upper limits on a given covered loss:

• $100,000 bodily injury limit payout per person
• $300,000 bodily injury limit payout per accident
• $100,000 limit payout on property damage

Deductibles

The declarations page also features details on deductibles, or the amount you pay out of pocket for a covered loss before your insurance coverage applies.

Premiums

You’ll quickly be able to see the total amount you pay for your auto insurance coverage.

Applied discounts

Information on active discounts and other financial incentives that can save you money is included. At American Family, we offer over a dozen ways to help you save on your coverage.

Your policy form and other important documents

Now that you’ve explored the declarations section of your policy, let’s look at a few other helpful documents that are included.

Insurance policy form

This standard document outlines the official terms and conditions of your auto policy. The content varies based on the coverages you purchased, but its purpose is to explain your policy benefits and limitations.

Insurance ID card

Keep this in your car or download it to your phone — it’s your proof of coverage. It usually includes the insured’s name, address, vehicle description, VIN, policy number, and effective dates, as well as the insurance company’s name and contact information.

Verification of insurance

Similar to the declarations page, this document is usually a one-pager that contains all the vital stats of your auto insurance policy and any additional coverages. It will also list the named insured(s), vehicle data, and coverage limits.

Insurance agreement

This portion of your auto coverage policy is the insurer’s promise to help protect you while your policy is active. The agreement is usually defined in general terms and points to other supporting documents to clarify how coverage is granted, limited, or excluded.

Exclusions

This section identifies situations where coverage may not apply. It lists specific named hazards — also called perils — in which coverage for a loss isn't typically allowed. Easily preventable losses, like water or rain damage to your car resulting from the windows being left open during a storm, won’t be covered. Most policies also exclude normal wear-and-tear.

Conditions

Conditions help specify certain obligations that must be carried out for coverage to apply. For instance, you may be required to file a police report if your car has been vandalized. Other conditions are state or federally mandated to help protect the consumer.

Contact American Family Insurance to learn more about your auto insurance policy

American Family wants to make sure you get the most out of your policy. And a big part of that is being confident you understand your insurance coverage. Take a look at some of the resources we’ve developed to keep you informed:

• American Family Insurance’s auto insurance glossary
• How to transfer insurance to your new car
• Ways to assess how much car insurance you need

And while you’re getting up to speed on your car insurance policy, be sure to reach out to your American Family Insurance agent for a review of your coverage. As a trusted adviser, your agent’s mission is to answer your questions and help empower you to confidently protect what matters most.

This article is for informational purposes only and based on information that is widely available. This information does not, and is not intended to, constitute legal or financial advice. You should contact a professional for advice specific to your situation.

This information represents only a brief description of coverages, is not part of your policy, and is not a promise or guarantee of coverage. If there is any conflict between this information and your policy, the provisions of the policy will prevail. Insurance policy terms and conditions may apply. Exclusions may apply to policies, endorsements, or riders. Coverage may vary by state and may be subject to change. Some products are not available in every state. Please read your policy and contact your agent for assistance.