When reading an automoble insurance policy, there is very important coverage information that every policy holder should know. Here are the answers to the most "frequestly asked questions" regarding auto coverage.

Most automobile insurance policies are composed of several interrelated parts. These parts are: declarations, coverages, supplementary payments, definitions, exclusions and conditions.

Here is a brief explanation of each section.

Declarations: The declarations section serves to personalize the policy by listing the pertinent information described in the policy, including the insured’s name and address, the policy number, the type of policy, dollar limitations on various types of coverage, descriptions of vehicles covered, deductibles, policy dates indicating the time period in which coverage is provided, any endorsements that modify the basic coverages and, if applicable, the names of any other organization or person to whom payment is to be made in the event of a loss (e.g., bank with loan).

Supplementary Payments: This provides for payment over the limits of liability noted in your policy for expenses incurred by the insurance company, all costs taxed against you in a court suit, attorney's fees, bail bonds (up to a certain amount) and related costs. It also covers reasonable expenses you incur at the request of the company. Most policies cover up to $200 a day for wage losses if attending a hearing or trial at the company's request.

It is important to note that such expenses are an important benefit to policyholders. To illustrate, a basic and very important provision of automobile liability insurance contracts is the promise of the insurance company to "pay for damages for bodily injury or property damage for which any insured is legally responsible because of an accident. In addition to our (the insurance company's) limit of liability, we will pay all defense costs we incur." Thus, coverage for legal expenses is a direct benefit to policyholders, expenses they would incur if it were not for the insurance policy.

Definitions: This section of the insurance policy defines the various terms used in the policy. It explains such terms as who is covered by the contract and what the company describes as the "covered auto."

Exclusions: Exclusions clarify the intent of the insurance policy by explaining the situations in which the policy will not cover you or the insured vehicle. You may be able to "buy back" coverage for certain exclusions by adding endorsements to the policy. Policyholders should pay special attention to this section and should be aware that the policy does not cover all things under all circumstances.

Conditions: This section establishes the conditions that must be present or complied with by the company and/or the insured. Examples of conditions include time-period restrictions, duties in the event of a claim, proof of loss, cancellations, etc.