American Church Group - Colorado

Knowing the Terms Can Help You Understand Your Auto Policy

Understanding your commercial auto insurance policy can sometimes seem as complicated as navigating rush-hour traffic in a crowded church bus. It doesn’t have to be intimating, if you know some of the common components and terms that every insurance policy includes.

All policies include the following components:

• Policy declaration pages – state the name of your insurer, the name of your ministry (the insured), the vehicles that your policy covers, the coverage period, and your coverage limits.
• Policy coverage forms – describe the actual terms of your basic insurance policy, as well as any additional or optional coverages that you have selected.
• Definitions – explain key terms and features used throughout your policy.
• Conditions – describe the ground rules, and yours and your insurer’s responsibilities, and/or obligations.
• Limitations – establish coverage boundaries and help remove ambiguity regarding the scope of coverage.
• Exclusions – describe the types of claims or property that a specific coverage form does not cover.

In addition to these components, auto policies also often include the following terms:

• Liability – coverage that protects your ministry against vehicle-related claims related to bodily injury and/or property damage.
• Collison – refers to the physical damage that another vehicle causes your vehicle in an accident.
• Comprehensive – vehicle damage caused by an accident involving something other than another vehicle (e.g., deer, tree branch, theft).
• Uninsured, underinsured motorist – refers to a driver who is at fault in an accident, but lacks or has inadequate auto insurance or limited coverage; or in some states, the at-fault driver is unknown (e.g., a hit-and-run accident).
• Medical payment – refers to the sum paid for medical treatment for injured occupants of your ministry-owned vehicles when they are in an accident. This may be paid regardless of which vehicle is at fault.
• Personal injury/no fault protection (PIP coverage) – applies in states with laws specifying that insurance companies must initially cover the cost of injuries for their own clients, regardless of fault.
• Deductible – refers to the sum that an insured individual must pay, after an accident, before their insurance company pays.
• Premium – the total price that a policyholder pays their insurance provider for a specific coverage.
• Liability or coverage limit – the highest amount an insurance company will pay in the event of a covered claim.

Although auto insurance requirements vary by state, auto policy terms are generally standard, regardless of the insurer. Acquaint yourself with these terms. Doing so may help you make better decisions regarding your auto policy and use of your ministry’s vehicles.