The insurance policy is the document that the insurer provides the insured after the contract between the parties. Its main objective is to prove the acceptance of clauses, terms, conditions, risks, coverage, effectiveness, rights and responsibilities of each one in car insurance.
Therefore, it is so important to understand what is insurance policy and what information should be included in the document, so that you are careless with the bureaucratic part of the business. Keep with us and know everything you need!
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What is car insurance policy?
The car insurance policy is a document that proves the hiring of an insurer’s services to protect the good. It should contain important information about what is being hired, such as the coverage, payment plans, validity, assists, etc.
When it comes to car insurance, the policy officializes the car franchise, prize value, validity deadlines for auto insurance, risk acceptance and protection in case of events that can already be predetermined, such as theft and theft. Understand how main information from a policy is distributed:
GENERAL CONDITIONS:
Rights and duties of insured and insurer
Coverage scope
COVERAGE VALUES
Ways of Payment of the Award
Award values and deadlines
Special Conditions:
Specific rules of the contract agreed between the parties
May vary according to the agreed
Change according to the type of policy and safe
Particular conditions:
Clauses that detail insurance particularities, such as:
Coverage
Compensation
Beneficiaries
Percentages
Deadlines
Validity
What is the insurance policy for?
The insurance policy serves to guarantee rights and duties and even as a legal protection for the parties, so they are a type of contract that establishes the insurer’s commitment to the insured to comply with the agreed, so it is essential to know the which is a insurance policy.
Police also help to streamline the insured’s processes. For example, if the car suffers a crash, with the policy it is simpler to know which documents request and what are the deadlines to communicate what happened, receive the coverage, etc.
What is the difference between insurance and insurance policy?
The difference between insurance and insurance policy is that the first is the formal agreement established between insured and insurer, while the policy is the document that formalizes everything that has been hired and therefore can still be used as a proof of that the business exists and is in force.
Thus, the vehicle protection service is insurance, while the document that records and officializes the hiring of the service is the policy.
Also read: I got involved in a traffic accident, what to do?
TYPES OF AUTO INSURANCE POLICY
Auto insurance policy types may vary according to the categories of coverage chosen by the insured and can be classified as open or closed. The open can be changed according to the needs of the insured, while the closed can not.
Usually Auto Insurance offers open policies and the most common categories are: multisco or comprehensive, against damage to third parties, named risks and compulsory policy. Understand in the table below how each one works:
| Policy type | Guarantee | Coverage |
| Multisco or comprehensive | Offers protection to the insured and its goods – is one of the most used in the market | Covers events such as theft and theft, fires and damage caused by flooding |
| Against damage to third parties | Offers compensation or reimbursement for damage that your vehicle may have caused to third parties | Covers especially material damage |
| Of named risks | Allows the insured to choose the coverage he will hire and the coverage is only made for what is explicitly described in the insurance policy | Usually covers the risks that may be inherent in the insured’s activity |
| Compulsory policy | Concerns required insurance, such as DPVAT (SPVAT) and the one used in condominiums |
You may like to know: SPVAT: What is and how the new DPVAT will work in 2025.
What is policy value?
Value of the policy is the maximum sum of the amounts that an insurer is willing to pay in cases of claim. This information should be included in the insurance policy itself, but can also be consulted on the insurer’s communication channels.
How to read and understand an insurance policy?
To read and understand an insurance policy you need to identify if all the rights and duties of the insurer and the insured are included in it. Observe the following notes to facilitate understanding:
Basic Data: Personal Information, Term Period, Award Values, Object of Insurance;
GENERAL CONDITIONS: presents the clauses and rules that define the rights, duties and responsibilities of the parties, as well as describe the items covered by auto insurance;
Special Conditions: These only appear in the policy if there are additional coverage or special clauses defined between insurer and insured;
Main coverage: values of each coverage, basic or additional, compensation limits;
Franchises and Decalement: presents the values of franchises and needs and what are the situations of application or exclusion of them;
Exclusions: reiterates what is not covered by insurance, situations that can invalidate the contract and other limitations;
Procedures: Makes clear how the insured can trigger insurance, service channels, documents necessary to trigger insurance and deadlines for communication;
Payment: Talks about the conditions and payment methods, due date, installment options and delays consequences.
Given this, what is insurance policy and that it must have maximum clarity and objectivity, including avoiding the use of very technical terms, that may confuse the insured or induce it to the error in understanding their rights and duties.
Where is the insurance policy number?
The insurance policy number is usually highlighted in the document, it is a numerical reference that the insurer provides to each contract in order to identify it. The text may have a different shape and size from the rest, to be in evidence, but this may vary according to the insurer or the type of insurance.
Also read: Who pays the loss in a traffic accident.
Now you know what insurance policy is, what it is for and how it works. Therefore, ensure the safety of your vehicle. Learn more about Insurance for Partner Application Driver 99.
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