An auto insurance declarations page (“dec page”) shows the amounts of coverage your insurance company provides to you, and how much you’re paying for the coverages. A declarations page is part of your original auto insurance policy and each policy renewal. You can usually obtain a copy of your declarations page on your auto insurance company’s website, if you don’t already have a copy.
Below is a Sample Declarations Page. Let’s go through each area of coverage and amounts of coverage under each area.
PART A – LIABILITY
Liability insurance covers other people’s damages when you are found at fault (liable) for a motor vehicle accident. The coverages in Part A are the maximum amounts your insurance company will pay other driver(s) and passenger(s) for bodily injury and property damages they sustain in a car accident with you.
California law requires every driver to carry written evidence of valid automobile liability insurance (or other evidence of financial responsibility). The California Department of Insurance requires that vehicle drivers must have a minimum of $15,000 of bodily injury liability coverage per person, and $30,000 per accident.
If another driver is found to be at fault, that person(s) liability insurance will cover your bodily injury and property damages. If the other driver(s) liability coverages are less than the amount of your damages, you may have insurance to cover all or part of your damages not covered by the other driver’s policy (discussed more below).
The Sample Declarations Page lists $100,000 in bodily injury liability coverage for each person (EA PER) and $200,000 for each accident (EA ACC). If this were your policy and you were at fault for an accident, your insurance company would pay up to $100,000 in bodily injury damages to other individuals injured in the collision, and a total of $200,000 in bodily injury damages for two or more other people injured in the accident.
Now let’s reverse the scenario. Let’s assume the other driver is at fault for the collision and has $100,000/$200,000 in bodily injury liability insurance. You could collect up to $100,000 in bodily injury damages from the other driver’s insurance company. If more people than you were injured in the collision, the other driver’s insurance company would pay up to $200,000 for everyone’s bodily injury damages.
For example, assume that you and two of your passengers were injured in the collision. Assume that you suffered $150,000 in damages and your two passengers each suffered $75,000 in damages. The total damages for the three of you is $300,000, which is more than the $200,000 limit under the at-fault driver’s policy. Because you suffered 50% of the total damages, and your damages significantly exceed the $100,000 limit for each person, the insurance company would likely pay you the maximum amount of $100,000. Because your two passengers each suffered 25% of the total damages, and less than the $100,000 limit, the insurance company would likely pay them $50,000 each.
Bodily injury insurance covers economic and non-economic damages. Economic damages (also called special damages) are objectively verifiable monetary losses, such as medical expenses and loss of income. Non-economic damages (also called general damages) are subjective, non-monetary losses, such as physical pain, mental suffering, and emotional distress. For example, lost wages are an economic damage because a specific amount of money lost can be objectively verified by pay stubs and tax returns. On the other hand, pain and suffering is a non-economic damage because the amount cannot be verified, and is based on each person’s subjective opinions and feelings.
The Sample Declarations Page lists $100,000 in Property Damage coverage for each accident. So your insurance company would pay up to $100,000 for the property damages you caused to the other vehicle(s) in the collision. California requires drivers to have only $5,000 in property damage liability coverage.
PART C – UNINSURED MOTORISTS/UNDERINSURED MOTORISTS
Uninsured Motorist Bodily Injury Coverage (UMBI)
Uninsured Motorist coverage pays for bodily injury damages to you and your passengers when the at fault driver is uninsured. Auto insurance companies are required to offer you this type coverage, but you have the option to decline. The Sample Declarations Page lists $100,000 in coverage for each person and $200,000 in coverage for each accident. If this was your policy and the at-fault driver was uninsured, your insurance company would pay you up to $100,000 for your bodily injury damages, and up to $200,000 for two or more people injured in the collision.
Underinsured Motorist Coverage (UIM)
Underinsured Motorist coverage pays for bodily injury damages to you and your passengers when the at fault driver does not have enough insurance to pay for all of your damages. Underinsured Motorist coverage is paid by your own insurance company after you have collected the maximum amount of insurance coverage from the at-fault driver’s insurance policy.
In California, Uninsured and Underinsured Motorist coverage are bundled together as a single coverage, with the same amounts of coverage. Some car insurance companies only list “Uninsured Motorists” on the declarations page, omitting the term “Underinsured Motorist.” The Sample Declarations Page shows an example of an insurance company omitting the term Underinsured Motorist. If you have a California insurance policy with Uninsured Motorist coverage, you also have Underinsured Motorist coverage, whether or not it’s listed on your declarations page.
As an example, let’s assume you’ve been in a car accident and the at-fault driver has the minimum bodily injury liability insurance of $15,000 per person. The collision causes you suffer $75,000 in bodily injury damages. After collecting the $15,000 from the at-fault driver’s insurance company, you still have $60,000 in uncompensated damages. This is where your Underinsured Motorist coverage comes in handy. If you had $100,000 in Underinsured Motorist coverage (like in the Sample Declarations Page), you could collect $60,000 from your insurance company for your remaining amount of damages.
No “Stacking” Underinsured Motorist Coverage with At-Fault Driver’s Liability Insurance
California does not allow you to stack your Underinsured Motorist coverage on top of the at-fault driver’s liability policy limit. For example, let’s assume you have $75,000 in bodily injury damages from an accident. The at-fault driver only has the minimum $15,000 in liability coverage, so you’re paid that amount right away. Now, let’s assume you have $60,000 in Underinsured Motorist coverage. It makes sense that you should be able to collect the full $60,000 from your insurance company, because this amount plus the $15,000 from the at-fault driver equals your $75,000 in damages.
Unfortunately, you cannot add or “stack” the $15,000 together with the $60,000. Your insurance company is entitled to a credit for the amount you collected from the at-fault driver. Therefore, your insurance company would subtract the $15,000 you received from the at-fault fault driver from the $60,000 you have in Underinsured Motorist coverage. You could only receive $45,000 from your insurance company, and a total of $60,000 for your damages. Even with Underinsured Motorist coverage, you would still have $15,000 in uncompensated damages.
It is usually pretty inexpensive to increase the limits of your Uninsured/Underinsured Motorist coverage. Having a larger policy can be very valuable when you are injured in an accident by an uninsured driver, or a driver with a minimal policy. Also, having a minimal limit of Underinsured Motorist coverage can backfire. For example, if the at-fault driver has $15,000 in liability coverage and you have $15,000 in Underinsured Motorist coverage, your insurance company would get a credit of $15,000 and not have to pay you anything.
PART D – PHYSICAL DAMAGE COVERAGE
Comprehensive insurance covers damages to your vehicle that are not caused by a collision. Comprehensive insurance is optional in California, so car insurance companies cannot require you to purchase this type of coverage.
Common examples of damages covered by comprehensive insurance are:
- falling objects
The Sample Declarations Page shows that the driver purchased Comprehensive insurance. The limit of this coverage is listed as “ACV LESS.” The acronym ACV stands for Actual Cash Value. The ACV of your vehicle is calculated using several factors, including mileage, age, wear and tear, options, accident history, and comparable vehicles. The word “LESS” refers to the deductible. A deductible is an amount of money you must pay in order for your insurance company to pay the covered amount of insurance.
On the Sample Declarations Page, the column next to the limits of liability shows the deductible amount of $500 for Comprehensive Loss. So, the maximum amount the insurance company would pay for Comprehensive coverage in this example is the Actual Cash Value of your vehicle minus the $500 deductible. If the ACV of your car is $10,000 and it is stolen, your insurance company would send you a check for $9,500.
Collision insurance covers damages to your vehicle from a motor vehicle collision, regardless of who is at fault. Collision insurance also covers physical contact with objects, such as a deer, tree, rock, building, guardrail, or a person. Collision insurance is optional in California, so insurance companies cannot require you to purchase this type of coverage.
The Sample Declarations Page shows that the limit of Collision Loss insurance is “ACV LESS.” The acronym ACV stands for Actual Cash Value. The ACV of your vehicle is calculated using several factors, including mileage, age, wear and tear, options, accident history, and comparable vehicles. The word “LESS” refers to the deductible. A deductible is an amount of money you must pay in order for your insurance company to pay the covered amount of insurance.
On the Sample Declarations Page, the column next to the limits of liability shows the deductible amount of $1,000 for Collision Loss. So, the maximum amount the insurance company would pay for Collision coverage in this example is the Actual Cash Value of your vehicle minus the $1,000 deductible. If the ACV of your car is $10,000 and your car has $5,000 in damages from an accident in which you were at fault, your insurance company would pay the repair shop $4,000 and you would pay the repair shop $1,000. If your car was deemed a total loss, your insurance company would send you a check for $9,000.
If you have any questions about auto insurance coverages or your specific auto insurance policy, call Savage Law at (760) 302-2088 and ask to speak to an attorney.