Understanding car insurance contract documents have been major problems for many car owners and people seeking car insurance policy. Many clients say they can’t read these documents due to the fact that it's been filled with legal terms difficult to understand and is voluminous, others said they don’t have time to read these documents and think it might not be necessary since they are paying their premiums. It should be pointed out that it’s vital to understand the policy you have chosen as it equips you with the necessary knowledge on what to do when you encounter problems while playing the road with your car. Problems such as;

Who to call when you encounter accident?

  • How to cancel your policy if you need to procedure to make a claim
  • Contact information of the insurance issuer and other vital information you may need concerning your dealing with your company.
  • This article is written for a proper understanding of your policy. It explains key elements of your policy that are vital for all auto insurance seekers and current holders.


Car insurance contract is a legally backed document which states the agreement between auto insurance companies called insurers and the policy seeker on how to manage risks associated with policy seeker use of his vehicle on the road. This document entails claims which the insurer is legally required to pay in exchange of premium which are normally remitted monthly, quarterly or yearly by the insured. This document usually is draft in a language both parties understand and are also designed to meet the specific needs of the insured.

Insurance Contract Papers Are Normally More than One Document

Other documents such as summary of your policy, Certificate of insurance, policy booklet, change in policy schedule and company’s contact information are also part of the contract. Also, advertising materials such as circular, banners, billboard are not part of a policy document including the oral agreement of both parties are in most cases not part of the contract document.

For example, Loya insurance contract document is divided into many sections depending on the policy. Generally, the following information is mainly contained in most insurance contracts;
  • Loyola Insurance Company information: This section contains information such as; logo, contact information such as address, telephone number, fax, website, and e-mail.
  • Private information of car insurance seeker: This section contains the name of the policy seeker, home address, place of work, location, mobile telephone number, house phone number and email address.
  • Driver’s information: This section contains private information about the person that will be driving the vehicle. In most cases, drivers’ private information is also the same as private information of policy seeker. It contains drivers name, home address, telephone number, valid license with date issued and also expiring date.
  • Vehicle information: This section contains the type of vehicle to be insured and its detailed internal and external descriptions.
  • Premium information: which contains the amount of money policy’s seeker will pay to Loya insurance in exchange for risk protection that may happen while driving on the road. This section also stresses if this amount should be paid monthly, quarterly or yearly.
  • Declaration Page: The information in this section includes: name of the company, name(s) and other personal information, identification of policy seeker or holder, policy number, time duration of the policy, the type of coverage purchased, premium charges and documents and forms that are part of the contract. The policy seeker signs typically this section as acceptance of the information.
  • Your Policy Cover: This section of the policy explains the insurance type you choose. It also highlights the additional coverage you took such as;

Personal items coverage

  • Towing
  • Emergency repairs
  • Storage cost
  • Trailer or caravan damage and much more extra coverage your company handle
  • Also, your policy cover contains what may affect your coverage. Such things like;
  • Driving under the influence of alcohol
  • Unlicensed driver using your vehicle
Some insurance company includes non-abidance to traffic rules under this section.

Claiming under your policy: This section addresses your responsibility when making a claim on your policy. It also states conditions you can make claims. It also points out the following;

How to settle disputes between you and the company

It also explains the procedure you should take when you have an accident for you to make a claim

How to pay your premium to

Making changes to your policy which might occur. Such changes include; canceling your policy if you want to sell or give away your car or changing your vehicle. Should we use health insurance?

In addition, most car insurance contract explains the code of practice, privacy of your personal information.

Other sections of the policy include:

  • Definitions of terms used in the insurance contract.
  • General condition of the policy.
  • Agreement and mutual condition of the contract and
  • When the coverage applies
Finally, it should be pointed out here that the Loya insurance contract’s structures are not limited to the points highlighted above. Each company chooses how the structure of this legal document is draft. The points highlighted above are always present in the majority of auto insurance contract documents.