Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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UPDATED: Oct 15, 2021

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Here's what you need to know...

  • Drivers need to understand their auto insurance policies
  • A copy of their approach should be provided by their auto insurance carrier
  • An auto insurance policy is a legal document
  • The policy will provide their personal information as well as different coverages they have elected and the exclusions

Many drivers simply never bother to look at or read through a copy of their auto insurance policy. However, it is wise to be familiar with it whether you receive this vital document electronically or on paper. If for nothing else, you should be informed regarding what you are paying for.

If you feel you are currently paying too much after reading your auto insurance policy, consider using an online auto insurance price comparison tool. These convenient tools make it easy to compare different policies and prices all on one electronic platform.

Start comparison shopping today by entering your zip code in our FREE tool!

What is an auto insurance policy?

Your auto insurance policy is a legal contract. Unfortunately, many drivers find their policies to be confusing or even overwhelming. However, the more drivers can understand their policy and be informed, the better off they will be. Each auto insurance policy consists of three different parts:

Declarations Page

This page is where you will find general information regarding your auto policy, such as your name, the coverage period of the policy, vehicle identification numbers (VIN), make, model, and year of the vehicle, and the amount of your premium, as well as your policy number.

It also provides you with a description of your coverages and the maximum dollar amount the insurance carrier will pay out for each type of claim.

You should check over the information on your declarations page carefully to be sure everything is correct. If you miss something incorrect, such as a VIN, you could have a claim denied.

Insuring Agreement/Coverage Types

This part of the policy is the most important, and drivers should spend some time familiarizing themselves with it. The insuring agreement explains the insurance company’s obligations to the driver for the premium they are paying. It will also say who is covered if other drivers on your policy, such as a spouse, child, or roommate.

This section is where everything about the policy is explained to avoid misunderstandings about either party’s obligation to one another, including a list of definitions and a list of exclusions to each type of coverage.

The exclusions section highlights what you do not have coverage for and reveals additional coverages you might want to consider adding. In the unfortunate event that you need to use your coverage, it is essential to know these pieces of information.

Conditions of the Policy

The final section of an auto insurance policy explains the driver’s responsibilities if a claim arises. It spells out how much time you have to report the claim to the insurance company and what documentation you must provide.

It also tells the driver the terms of canceling the policy, whether done by the car insurance carrier or the policyholder. As the consumer, you have the right to cancel the policy at any time.

On the other hand, your insurance carrier may only cancel under certain conditions and with advance notice to the policyholder.

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How do I get a copy of my auto insurance policy?

A hard copy of your auto insurance policy should be mailed to you by your insurance carrier at or before the policy’s commencement date.

Some auto insurance companies will also email you this document or provide you with access to it via their own website. Contact your auto insurance carrier if you do not have a copy of your policy or know where to find it.

Auto Policy Coverages

Within the insuring agreement of your auto policy, your policy components will be listed. Your auto insurance policy is more like several smaller policies as each covers different types of circumstances and damages. Drivers must understand which types they have elected and what they are covered for. Coverage types include:


This is the minimum amount of car insurance coverage a driver can purchase and is legally required by most states. Bodily injury liability covers physical damages you may cause to another party. In contrast, property damage liability covers costs to repair or replace property you have caused damages to.

Uninsured/Underinsured Motorist

If you are hit by another driver who does not have insurance or does not have adequate insurance, this type of coverage can help provide for the expenses you face. In addition, in some states, this coverage is a legal requirement.


Suppose your car is damaged or lost due to something other than a collision. In that case, the comprehensive piece of your policy will likely cover it. Comprehensive covers theft, vandalism, hail, fire, flood, hitting wildlife, explosions, and falling objects.


If your car collides with another vehicle or object, such as a building, your claim will fall under the optional coverage piece of collision.

Medical Payments

Some states require drivers to have medical payments coverage. This is primary coverage for medical expenses for you and your passengers if you are hurt in an accident, no matter who is at fault.

Drivers who ensure they understand their auto insurance policy and that all the information is correct are making their money work harder for them.

By doing so, you may add more coverage to have better protection or drop some types of coverages you do not feel are necessary.

Either way, if you are paying too much for your auto insurance policy, use an online auto insurance price comparison tool today to put more money back in your pocket. Enter your ZIP code into our free tool to get started!