Major General Provisions
If you've read through the long document that goes through all the benefits of your insurance plan, you know that at the very bottom, there is an odd section called "general provisions." But what are general provisions and how do they affect your insurance?
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Most insurance companies use a standardized policy called the Personal Auto Policy (PAP)
which is divided into different sections. The breakdown of a standard PAP looks like this:
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- Declaration. This includes information such as your name, address, name of lender, details of the car, and coverage limits.
- Part A Liability Coverage. This includes claims against the insured that may have resulted in bodily injury or property damage.
- Part B Medical Payments. This relates to medical costs as a result of an accident, regardless of liability.
- Part C Uninsured/Underinsured Motorist Coverage. Part C covers losses and costs as a result of a hit-and-run or motorist that does not have insurance.
- Part D Damages. This section includes both damages cause by a collision and damage from non-collision incidents, such as debris on the road.
- Part E Duties after a loss. The insured has certain requirements and duties should there be a loss. A failure to follow through could nullify coverage.
- Part F General provisions.
What General Provisions Means
Part F covers the general conditions that apply to the whole policy,
which includes topics like bankruptcy, fraud, or cancellation.
Here is a list of common items found on insurance policies under the general provisions section:
- Bankruptcy. What happens if the insured causes an accident, is sued by the injured, and then declares bankruptcy? The standard position is that the insurance company is still obligated under the policy, which protects anyone injured by the insured.
- Fraud. Any fraud on the part of the insured voids the policy.
- Policy period and territory. In what location is the policy valid and for how long?
- Termination of the policy. Cancellation, suspended or revoked license, nonrenewal, payment failure, etc.
- Legal action against the insurer. The insured cannot bring legal action against the insurer until all the requirements of the policy are met.
- Changes to the policy.
- Having more than one policy. If there is more than one policy that applies to an accident, this part specifies that the policy limit will not be higher than the highest limit on any one of the policies.
The general provisions section of an auto policy can vary from state to state. Some providers, like Allstate and State Farm, use a different form, so be careful to read all the details of your agreement.