At first glance, your car insurance policy document might seem overwhelming with its pages full of fine print, numbers, and technical terms. However, it contains crucial information that you as the policyholder need to know in order to avoid being underinsured or caught off guard when you need it most.
In this article, we’ll break down the key sections of your policy, helping you identify what to look for so you can confidently ensure you have the right coverage and avoid any surprises down the road.
What Is an Insurance Policy Document?
In insurance, a policy document is a formal contract between you and your insurer that outlines the terms, coverage, and conditions of your policy. You will receive it either by email in the hours or days after purchasing a car insurance policy, and/or by mail. When you do, it is crucial that you read it and make every effort to understand it, as that will help you avoid surprises when filing a claim and ensure you are fully aware of your coverage and responsibilities.
What are the Contents and Structure of a Standard Car Insurance Policy?
While each insurance provider’s policy documents may vary slightly, they generally follow a similar structure and have the same contents inside, including:
- A summary of your policy
- Your payment schedule
- The insuring agreement
- Definitions
- Exclusions
- The terms and conditions
Coverage summary
The coverage summary, also known as the declaration page, provides an overview of what your car insurance policy covers, including key details like your policy number, coverage types, limits, and total premium. It offers a quick reference to the most important information without needing to go through the entire policy document.
Payment schedule
The payment schedule details your payment responsibilities, including the annual premium amount, payment frequency, due dates, and available payment methods. You always want to review this section carefully in order to avoid late payments, penalties, or a lapse in coverage. Also, be sure to set reminders for these dates or set up automatic payments to avoid missing any due dates.
Insuring agreement
The insuring agreement outlines the responsibilities of both the insurer and the policyholder, detailing what the insurer is obligated to do and what is expected from you. This is important information to familiarize you with as it outlines what you need to do to ensure your policy remains in effect.
Definitions
The definitions section of your car insurance policy explains key terms, often highlighted in bold throughout the document, to clarify their meaning within the context of your coverage. If you’re unsure about any terms, take the time to research or ask your insurance broker for clarification to ensure you fully understand the details of your coverage.
Exclusions
The exclusions section outlines what is not covered by your car insurance policy. It usually contains a list of the risks you may need to manage independently, such as wear and tear, business use, and intentional damage. Keep in mind that certain exclusions, like claims related to alcohol use or illegal activities, may void your coverage entirely.
Terms and conditions
The terms and conditions section is the fine print of your policy and may be a bit tricky to understand. However, always try to as it includes key details about actions that could invalidate your coverage and explains the process for canceling, renewing, or making changes to your policy.
Is the Declaration Page the Same as Proof of Insurance?
No, the declaration page (or summary page) is not the same thing as proof of insurance and will not be accepted as such. In Canada, proof of insurance typically comes on pink paper or a pink background, making it easily recognizable and distinct from other documents you receive from your insurance provider.
Declaration/summary page
- Typically one of the first pages inside the multi-page document your insurance provider will send you upon the purchase of a car insurance policy
- Includes key information about your policy, such as your policy number, coverage limits, policy effective and expiry dates, and premium amount
- Provides an overview of your policy but does not serve as proof of insurance
Proof of insurance
- Typically comes printed on pink paper or is sent to you on a pink background
- Includes the name of your insurance provider, your policy number, your name, your address, the make/model of the insured vehicle, and the effective and expiry dates
- Acts as official proof that you have active insurance coverage
- Required to carry it anytime you’re driving
Do You Have to Carry Insurance Documents In Your Car?
Yes, you are required to carry proof of insurance while driving. Remember, your proof of insurance is not the same thing as the multi-page document you receive from your insurance provider when you purchase a policy. Rather, it comes in the form of a certificate or card, also known across Canada as a pink slip.
In some provinces, including Ontario and Quebec, digital proof of insurance on your phone is accepted. However, as the Autorité des marchés financiers (AMF) in Quebec advises, it’s always a good idea to have a printed copy on you as well. This ensures you’re prepared in case your phone battery dies or you travel to another province where electronic proof may not be accepted.
Do You Have to Keep Old Car Insurance Documents?
Although you don’t have to keep your old car insurance documents once your policy has expired, it is generally recommended that you keep any documents related to any claims for several years in both Québec and Ontario. While there’s no specific legal requirement, retaining them for three to seven years is a good practice in case of any future disputes or reviews. Insurance companies may request these documents later, and some claims can take time to fully resolve. In Ontario, you generally have 2 years to file a lawsuit, while in Québec, it’s typically 3 years. Keeping your claim documents for a few years is a prudent approach.
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