Demystifying Your Car Insurance Policy

The following is a guest blog from Neil Richardson, an advisor for The Zebra, the nation’s largest car insurance comparison marketplace.

When you are purchasing car insurance, you’re sure to come across many documents containing all sorts of information. No, they’re not actually written in Greek, but sometimes it may seem they are. Do you need to do anything with these pages? Which documents are important? Will you need to print any of them? We’re here to clear up the details of your car policy contract and let you know which documents are most important.


We’ll start with the most commonly recognized document in your policy packet which is your insurance ID card. This is your legal, state-required* proof of insurance document and it’s normally what you show a police officer if you happen to be pulled over. Each insurance company’s ID card looks slightly different and may vary in certain details but they all contain:

  • Name of the insurance company
  • Policy period (start and end date of your coverage)
  • Policy number
  • Policy holder’s name
  • Vehicle(s) covered on the policy

*Currently all states allow their residents to use digital proof of insurance except Connecticut, Hawaii, Massachusetts, New Hampshire, New Jersey, New Mexico, Virginia, and Washington D.C.

Another document in your policy packet is the declarations page. You’ll want to hold onto this and store it as a record of your coverage. This document is essentially the invoice of your policy and contains several crucial pieces of information:

  • Drivers – all the drivers covered and/or excluded under the policy including the primary policyholder
  • Vehicles – all the vehicles covered under the policy and the lienholder information if the vehicle is financed
  • Premium – the total cost of your policy per term, including any applicable fees Editor’s note: At Metromile, you will see your base rate plus per-mile rate. Since your monthly bill changes depending on how much you drive, your premium will vary from month-to-month.
  • Coverages and Limits – a breakdown of coverage included on the policy, the amount of coverage, and to which vehicle the coverage applies
  • Deductibles – the amount you need to pay out of pocket to get your vehicle repaired for any covered incident
  • Policy Period – Though this is not applicable for Metromile’s pay-per-mile model, on other policies it would indicate the beginning and end dates of your policy term, which are normally over 6 or 12 months

You will want to keep your declarations page handy when you are shopping for a new policy as this is going to show you exactly what is included on your policy and will allow you to compare rates that other companies offer for the same coverage. This document is also sent to your lienholder if you are financing a vehicle since it lists the bank as having a financial interest in your vehicle if it is ever totaled in a covered incident.

The insuring agreement (sometimes called a policy contract or insurance contract) is another important document since it breaks down the specifics of your auto policy. This document, which includes any endorsements purchased or added to the policy, will provide the scope of how your policy works, what you can expect from the company, and what the company expects from you. A portion of your insuring agreement will include:

  • Exclusions – this breaks down what the company absolutely will not cover in the event of a claim
  • Conditions – who qualifies for coverage under the policy and what vehicles qualify for coverage
  • Definitions – this explains specific wording as it applies to your coverage to avoid confusion as to who or what the document description is referring

If you want to learn more about your car insurance policy, check out The Zebra’s In Plain English information hub. Editor’s note: Now that you understand the components of your car insurance policy, why not see how much you could save with Metromile’s pay-per-mile insurance offering? Get a quick, free quote here.