Understanding a Motor Vehicle Insurance Policy: Can You Tell What Benefits You Are Entitled to Just by Reading the Policy Yourself?
Author: Attorney W. Coleman Allen, Jr.
The short answer to this question is an emphatic "NO!" The answer is emphatic, because the language of the policy might not only be incomplete, but actually misleading. Consequently you may miss coverage to which you are entitled that is not even described in the policy, and may in addition fail to recognize what coverage is provided, because some of the terms used in the policy have very different meanings than they do in everyday conversation.
The "Rules of the Road" concerning insurance coverage are provided by state rather than federal law in the United States, under the U.S. Constitution. So the rights of injured motorists in policies issued for delivery in Virginia are governed by the statutes of the Commonwealth of Virginia. In addition to these statutes, the Bureau of Insurance of the State Corporation Commission is authorized to issue, and periodically issues updates of, a "Model Policy" of motor vehicle insurance, to which every insurance company writing coverage in Virginia must conform. If an insurance company such as State Farm, Allstate, or GEICO, issues a policy that gives less coverage than the Virginia statutes require or than is contained in the Model Policy, then the policy issued by the insurance company will be "automatically revised" by law to match what is required by statute or the Model Policy. One clear result of this law is that even if an injured person were able to interpret the language contained in a motor vehicle insurance policy correctly, he or she still would not know the full measure of the coverage provided, because that would require review of both the relevant statutes and the current version of the Model Policy, in addition to the policy.
The written insurance policy you are given when you first purchase the policy consists of two parts. The first part is the Declarations Page, sometimes referred to as the "Dec Sheet," which describes who the "named insured" or owner of the policy is; what vehicles are covered; and the specific coverages that you have purchased. Typically the Declaration Page also shows the cost of each coverage on each vehicle.
The second part of the policy, referred to as the "body" of the policy, generally includes ten to fifteen pages of small print, which explains the details of the coverages listed on the Declaration Page. As Mark Twain commented almost a century ago, "the big print gives you the coverage, and the small print takes it away!" These provisions buried in the body of the policy contain "exclusions," which do indeed "take it away" when applied to the insurance coverage afforded. The body of the policy also contains "conditions", which further limit the coverage. As indicated above, however, if the insurance policy sent to you by your company contains exclusions or conditions that are not permitted by a Virginia statute, or that are inconsistent with the Virginia Model Policy maintained by the Bureau of Insurance, then those exclusions or conditions are null and void, and will not be given effect in law. In other words, you are entitled to the coverage, despite the insurance company's attempts in the small print to "take it away," if there is a conflict with a statute or the Model Policy.
A new Declarations Page is sent each time the policy is renewed, often annually, but a copy of the body of the policy is usually only provided when the insurance coverage is first purchased. If you no longer have the body of your policy, a new one can be obtained from your insurance agent, and should be kept with your other important papers.
Aside from the need to consult and to understand the relevant statutes and the Model Policy in order to determine coverage, it is also necessary to understand the special meaning given to certain words that are frequently used in insurance policies, because their meaning when found in an insurance policy is often not the same as the meaning those words have in everyday conversation. The legal description of such special meaning given to certain words is "terms of art," signifying that they have a unique meaning when they appear in a specific legal context, that is not the same as their ordinary meaning. For example, in everyday usage, simple logic tells us that every motor vehicle is either "owned" or "non-owned" in relation to any specific individual, since any person that we name either owns the vehicle or does not own it. However, when these terms are found in an insurance policy, they have special meanings, such that there is indeed a third category aside from "owned" and "non-owned" vehicles. Anyone attempting to read an insurance policy who encounters these words and attaches the ordinary, everyday meaning to them, will therefore misread the policy and reach the wrong conclusion as to what coverage the policy provides.
For these reasons, it is EXTREMELY IMPORTANT to consult a qualified attorney under any circumstances in which benefits are provided to an injured person through insurance coverage, rather than attempting to interpret the policy yourself. Every year in Virginia, deserving claimants are deprived of millions of dollars of insurance benefits to which they are entitled, simply due to their failure to obtain proper advice from an attorney who specializes in handling cases involving personal injury or wrongful death, and who possesses specific expertise in the complex subject of the law of motor vehicle insurance coverage. With the Allen Law Firm, the initial consultation is always free, so there is no reason not to find out what your rights are.
About the Author: Coleman Allen is an auto accident lawyer in Richmond VA. He has a career spanning over 30 years with the Virginia personal injury law firm Allen & Allen. In addition to car accident cases and truck accident cases, Coleman has successfully cases involving defective products, brain injury, wrongful death and aviation accidents.
Editor's Note: The author of this article, W. Coleman Allen, Jr., is also the author of the book "Sources of Coverage: Insurance Coverage for Personal Injury Actions in Virginia," now in its sixth edition, 544 pages, often referred to as the "bible" of insurance coverage in Virginia. That book is the most widely used reference in Virginia on insurance coverage for personal injury and wrongful death claims.
 Under the U.S. system of government, as specified in the U.S. Constitution, some areas of law are controlled by federal law, and other areas of the law are reserved to the states. Insurance is generally an area of the law that is reserved to the states.  As the law of insurance is generally reserved to the states, and each state's laws may therefore be different, this article is primarily concerned with auto insurance in the Commonwealth of Virginia.  Interestingly, there is no Virginia "model policy" for any other type of insurance policy except a family automobile insurance policy; there is no "model policy" for homeowner's insurance, life insurance, fire insurance, commercial liability, etc.  For an example of what a "Declarations Page" or "Declarations Sheet" looks like, see the one at http://www.onlineautoinsurance.com/learn/what-is-policy-declarations-page.htm.  As the terms are defined in the Model Policy, "owned" means a vehicle listed in the policy, and "non-owned" means a vehicle not owned by either the insured or any relative who resides with the insured. So, if the insured owns another vehicle that is not listed in the policy, then as to that policy, the vehicle is neither "owned" nor "non-owned".