Every six months your auto insurance company mails you a declarations page (AKA “dec page”) listing your coverages, amounts of coverage, and premium.  To ensure you’re protected in the event of a lawsuit or bodily injury claim, it is important to understand the coverages you’ve purchased.

I’ll stick with just three coverages for now: 

  • Liability insurance protects you if a claim or lawsuit is brought alleging you were negligent in injuring somebody else. 
  • Uninsured motorist coverage provides compensation to you (as well as family members and vehicle occupants) if you’re injured by an uninsured or unidentified driver (like a hit and run collision). 
  • Underinsured motorist coverage compensates you if you’re injured and your damages (medical expenses, loss of earnings and pain and suffering) exceed the responsible driver’s liability coverage.

Most personal auto policies have “split limits” (like $25,000/$50,000, $100,000/$300,000 or $250,000/$500,000).  The first number is the most the insurance company will pay for bodily injuries to any one person (including to all survivors for a single fatally injured person).  The second number is the most the insurance company will pay for all bodily injuries per accident. For example, if you have liability limits of $100,000/$300,000 and you cause a collision that injures seven people, your insurance company will pay no more than $300,000 for all injury claims, subject to a limit of $100,000 to any one injured person.

It’s essential to review your dec page to make sure you have adequate protection in the event you’re injured in or liable for causing a motor vehicle collision.