Understanding your auto insurance policy
At first glance, an auto insurance policy can seem like a confusing conglomeration of words and numbers. However, the information in the policy is important for you to understand and when broken down, it's not nearly as confusing as it is when you first look at it. First let's take a look at the different types of coverages. Then we'll look at the policy in detail.

Third party insurance
Third party insurance is compulsory. TPI (sometimes called your "Greenslip") is usually a requirement for registering your car. This type of insurance protects you against personal injury claims caused by an accident.

Comprehensive insurance
Comprehensive insurance will cover damage done to your own car and damage done to other people's property if you car is involved in an accident. The policy will cover only the insured, so if someone else is driving your car, they must be covered under your policy in order to file a claim.

Third party property insurance
Third party property insurance is different from the third party insurance you pay for when you register your car. Third party property insurance covers damage caused by your car to other people's property, but does not cover the cost of repairs to your own car.

Third party fire and theft
Third party fire and theft insurance covers damage caused by your car to other people's property. The policy will also cover loss or damage to your car due to theft or fire on a limited basis.

Uninsured motorist extension
This extension covers damage done to your car by an uninsured motorist. The amount the policy covers is limited, usually up to $5,000.

The policy itself
Now that you understand the different types of insurance, it's time to review the actual policy itself.

Declarations
The first part of your auto insurance policy is referred to as the Declarations. The declarations "declare" the terms of the policy such as the make and model of your car, the name(s) of the insured, the dates the policy is effective, the policies cover types and limits and the cost of the policy.

The insuring agreement
After the declarations comes the insuring agreement. The insuring agreement details exactly what the insurance company is promising to provide. This part of the policy goes into detail regarding the extent of each coverage in the policy and who on the policy is covered for what.

Definitions
The next part of the policy is the definitions. This section of the policy explains in detail the wording used in the policy. Think of it as a glossary to your auto insurance policy. It is meant to help you understand the meaning of the legal jargon used.

Exclusions
The exclusions section of your auto insurance policy detail what the policy will not cover. It is important to read this section carefully so you understand what your insurance won't take care of and what you are responsible for.

Conditions
The conditions section is another section that you will want to read through very, very carefully and you will need to read it again should you have to file a claim. This section of the agreement details what your responsibilities are in the event of a claim situation. If you do not follow the steps in this section carefully when you need to, your insurance company may not cover the claim.

By using the information above as a road map to your auto insurance policy, you should have no problem understanding the terms and conditions contained within the policy.