Every person driving a vehicle should possess auto insurance according to the law. However, very few people understand the basics of auto insurance policies. It is not necessary to become an expert on auto insurance but it is definitely necessary to comprehend the major intricacies involved in these policies, particularly the rules and regulations that govern them in the state of Alaska.
Basically, any auto insurance policy would have five parts, even though the exact details might vary marginally from insurer to insurer.
Declarations
The declarations by the person applying for the auto insurance policy are the first part in this process. These declarations contain the personal details about you and other drivers in your household. The names of all the drivers, the house address, the make and model of the vehicles in the household, their identification numbers, the duration of the policy, and finally the policy number. This section would also have the type of coverage that is being purchased, the insurance policy limit, and the deductible for that policy. This section is important because the information provided by you should be accurate. If any inaccurate information is detected later, your claim would be denied by the insurer.
Insuring Agreement on Coverage
This section would include the coverage limits and the coverage options. The type of coverage like comprehensive, collision, liability, medical, etc. would be explicitly stated in this section. This is the section that defines the commitment of the insurance company as a return on your monthly payment. This would include the type of coverage and the coverage limits that had been agreed upon between you and the insurer.
Exclusions
This is another important section, since the details of the items that are not covered by your insurance policy and its limitations are highlighted in this section. When the statements in this section are combined with the previous section, they would determine what items are covered and what items are not when you make a claim under your policy. You should study this section carefully to understand exactly what you would be getting and what would be excluded. Then only you would be able to correct any deficiencies in coverage.
Terms and Conditions
This section lays down the legal responsibilities of the person purchasing insurance, as well as the insurance company. These responsibilities would include the obligations regarding premium payment, the steps for filing any claim, and the disagreement resolving procedures.
Definitions
This section explains the terms used in the auto insurance policy and outlines the exact rights of the person buying the policy and the rights of the insurance company. This section is called ‘fine print’, since certain terms could be interpreted in more than one way.
From the above, it is clear that the person planning to buy auto insurance policy should understand exactly what are the specific expectations, needs, and requirements of the policy before deciding on the type of coverage and the terms of agreement. It is worthwhile to take ample time to study the terms of the policy and the conditions presented by the insurer before deciding on the type of policy that should be purchased.
