An Auto Policyholders Rights, Responsibilities,
and Reasonable Expectations.

When you purchase an insurance policy, you are in fact entering into a contract. A valid contract has three main parts. It must be between two people of sound mind, it must be for a legal purpose and there must be consideration, (money). It is not the intent of this information to discuss an auto policy in detail, however we will share the four main portions of the auto policy for your basic understanding.

For a memory jog, we will use DICE to help you. Every auto policy has these four main sections. D is for the declarations page, it tells about who you are, where you live, and other pertinent information about you. I is for the insuring agreement, what vehicle is insured and for what coverage’s were purchased. It is important to know that the serial number of your vehicle is what specifically identifies it as the one insured by the policy contract. C stands for the conditions, what you and the insurer has agreed to have for coverage to apply. Certain coverage’s are not required, other are, often by state law. E is for the exclusions contained in the policy. Occurrences such as war and deliberate acts by the policyholder are not covered as well as other exclusion specifically listed. So DICE is the memory word to recall the four parts of your auto policy.

It is very important that a policyholder have a clear meaning of insurance and the term indemnity. In general terms your auto insurance is a contract to repair or replace your vehicle that has been damaged in a covered loss. Three basic requirements of a claim are that it must be sudden, accidental, and unforeseen. That is why things like worn out tires and rust are not covered by the policy. These are conditions or things that happen over a period of time. A deliberate act by a policyholder is also not covered. Obviously a deliberate act to damage your vehicle is not accidental and the results not unforeseen. You must also understand that the standard auto policy is what is called an ACV policy. That means it is a policy that pays claims on an Actual Cash Value basis. Your half worn tire damaged in a covered loss will not be paid for in full by your policy. The claim payment will be reduced to the actual cash value of the tire at the time of the loss or damage claim. A half worn $100 tire damaged in a covered loss will be depreciated 50% and the actual cash value of it will be $50.00. Cars totaled will not be valued on it's cost new, but the cost new less applicable depreciation, or based on the local market value of a vehicle or vehicles comparable. At times, insurers will base a vehicle's evaluations on nationally approved car guides such as NADA. If you go to check the book value of your vehicle yourself, be sure the book is the correct one for your area of the country, covering the month of your accident, and that all options and mileage factors are properly considered.
 
Contact AccidentCheck.com for additional information about your auto collision policy.