How to Read Your Auto Insurance Policy

Updated January 23, 2024  |   Published August 22, 2023

An auto insurance policy is a contract between you and your insurance company. You agree to pay the cost of the insurance policy, called a premium, and to obey the insurance company’s stated rules. In return, the insurance company agrees to pay for certain expenses associated with an accident or other covered losses. Have you ever read through your entire auto insurance policy? Before you purchase a new policy, it might be a good idea to read your auto insurance policy to review your coverages, and see if anything has changed. Continue reading for a step-by-step walkthrough on how to read your auto insurance policy.


Parts of an Auto Insurance Policy

There are several parts to an auto insurance policy. The first part is the declarations page, and the second part is the policy form. An insurance declaration page declares the basics of who and what is covered. The policy form goes more into depth about conditions, exclusions, and the overall agreement between you and the insurance company. Some other parts of an auto insurance policy are the insurance ID card and verification of insurance.


Declaration Page

A car insurance declaration page is typically the first page of the insurance policy that you see. It contains basic information about your policy as well as the name and contact information of your insurance company. The declarations page allows you to tailor an insurance policy to your individual needs. It gives a comprehensive summary of what your auto policy covers. While it may not go into great detail about each facet of your insurance coverage, it can give you a good idea of your coverage amounts and the basic elements of your policy. An insurance declaration page will contain the following information:

Policy number

This is your unique policy number, which you’ll need when filing a claim.

Policy term

Lists the effective date and expiration date of your policy. Don’t wait until your policy period has ended to renew, as any lapse in insurance coverage can be problematic.

Policyholder address

The address listed must be that of the policyholder and the primary location at which the vehicle is kept.

Named insured

Any driving resident of your household should be listed under “named insured” or “additional drivers” unless you specifically exclude them.


lists bodily injury and property damage liability, as well as any elected coverages such as comprehensive, collision, etc.

Policy limits/deductible

Lists the maximum amount that each coverage will pay as well as any required deductible you have to pay out of pocket.


The amount you’ll pay over the course of the policy term. Can be listed as a six-month or one-year total.


Insurance Policy Form

There are several different parts of the Insurance Policy Form, including:

Insuring Agreement

This is where your insurance company promises to actually provide coverage in exchange for the premium you pay. It also explains the specifics of what is covered in your policy. This is where you’ll find any perils (causes of loss) that are explicitly covered.

Conditions of an insurance policy

This section lists any rules, provisions, obligations, or codes of conduct to which you are required to adhere. If you are in breach of any of these conditions, it is likely that coverage or claims will be denied.

  • Some of the common conditions include the documentation required when filing a claim as well as the amount of time that you have to file a claim after an accident. It is your responsibility to file a claim in a timely manner. If you miss that window, your claim will be denied.
  • This section also contains information regarding the terms for cancellation of the policy. The terms are both for you and for the insurance company. While you can cancel your policy at any time, the insurer has to give advance notice and can only cancel your policy for certain reasons.

Auto Insurance Policy Exclusions

Knowing what your policy won’t cover is almost as important as knowing what it will cover. This is what the policy exclusions list covers. These exclusions can differ by state and from one driver to another.

Typical insurance policy exclusions include

  • Intentional damage or bodily injury
  • Government action or confiscation
  • Using a vehicle for prearranged racing events
  • Catastrophic events: war, nuclear accidents, etc.
  • Using your vehicle for delivery/ride-share purposes

Endorsements or riders on a car insurance policy

This is where you add any specific coverages you may need. If you own a modified vehicle, be it for mobility, performance, or cosmetic reasons, your modifications will require extra coverage. Other endorsements include things like rental car coverage, roadside assistance, or coverage for transportation costs should your vehicle be unable to be driven. It’s important to note the cost of your premiums will likely be affected by any additional endorsements.


Insurance ID Card

This is designed to be downloaded on your phone, printed out and kept in your car, or both. It is a key document to have handy. On it, you’ll find the insured’s name, address, vehicle details, VIN, policy period and the insurance company’s name and contact info, along with your auto policy number.


Verification of Insurance

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


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