Definition of Insurance Card
An insurance card is an agreement made between you and the insurance company. It confirms in writing that an insurance policy will be issued. The insurance card is proof of insurance that you can use until you receive your actual policy. It may be issued for a limited time and contains an expiration date.
What Does the Insurance Card Include?
The insurance card should include all necessary information about the contract that has been purchased. It must contain seven key elements.
Risks
The insurance card should specify the insured risks. It should include the make and model of the car and the Vehicle Identification Number (VIN) if it is for a vehicle. It should include the address of the insured location and the amount of insurance on the property (the value of the insured property) if it is for real estate. It should also include the value of the insured contents if it is for an apartment or condo.
Liability
The insurance card should specify the amount of liability insurance. It will display the limits for coverage to the insured (insurers) and property.
Deductible and Coverage Limits
The insurance card should mention the deductible for each section of vehicle or home insurance. It should also mention the types of coverage and their limits for each section. The insurance card may also include any endorsements you have purchased as they are an essential part of the coverage plan.
Insured Parties
The insurance card should name all insured persons, along with any additional insureds. The insured is often the owner of the property. Other insureds may include co-owners if the property is titled in one or more names. The insurance card will also mention any beneficiaries of a mortgage or lien holders. The company should be listed.
The Company
The insurance card should clearly state the name of the insurance company. It should specify the type of coverage that has been purchased. Plans have many levels of coverage, especially for homes, so the types should be clearly stated on the insurance card to leave no room for error.
Duration
The insurance card will specify the duration of the insurance: the start date and the expiration date of the coverage.
Agent
The insurance card should name the agent who certifies the policy. The insurance card may also include a disclaimer stating that it is subject to the terms of the policy wording.
Who Needs an Insurance Card?
You should request an insurance card whenever you purchase a plan to have proof that you will receive the policy. You can ensure that what you requested for coverage is indeed insured.
Auto Insurance Cards
The auto insurance card is often used to prove that you have insured your vehicle. It may be required by a car dealership, rental company, or financing company when purchasing a new car. Coverage such as liability, collision, or comprehensive should be displayed, along with deductibles for each. Terms applying to any financing companies should also be visible.
Home Insurance Cards
The home insurance card is used to prove that you have coverage on your home. It is commonly used when closing on a new property so you can prove to the lender or mortgage company that the home is insured. It should show the amount of insurance on the building, along with the deductible, the insured, and the duration. Mortgage terms should also be displayed.
Example of How an Insurance Card Works
Let’s say Tom is buying a new home. He forgets to contact the insurance company until the last minute. He is then able to get a quote and confirmation of the policy for the residence, but the company cannot process all the paperwork immediately.
The real estate agent advises him to have proof of insurance at closing. The legal document will provide proof so he can complete the closing of his home. Tom contacts his insurance agent and requests an insurance card.
He can disregard the insurance card when he receives the actual insurance policy since it will contain all the full information.
When is an Insurance Card Issued?
The insurance card should be issued immediately upon your request to purchase an insurance plan. This is your temporary proof that you are insured.
It is
The insurance card is useful when the insurance plan documents, such as the declaration page and policy forms, are not immediately available. It may take a few days for the company to process all the required paperwork before issuing the policy. The insurance card is an essential part of proving that you are currently insured.
What does the insurance card not include?
The insurance card is a summary designed to give an overview of the main coverage of the plan until the actual document arrives. It often does not specify the fine details of coverage, such as specific limits on home plans.
What if you do not receive the document?
It is important to ensure you have a copy of your document. The insurance card does not replace the policy. It is not intended to be a long-term contract. There could be a significant issue if you do not receive your document before your insurance card expires. Follow up on your contract and ensure it has been issued.
You are at risk when your insurance card expires until you have a valid contract in hand, even if you have paid for the plan. You have the right to receive a copy of your contract. Always follow up to ensure your document has been issued.
Contact your state’s insurance commissioner to help you find out what is happening if you are having trouble obtaining your contract. Insurance fraud happens sometimes, and following up to get your contract will help you avoid any problems. Your agent should be able to resolve the issue and obtain your document within a few weeks.
Frequently Asked Questions (FAQs)
How long is the insurance card valid?
The insurance card should be valid for a specific period written on the document. It is only valid until the actual policy documents are printed and issued. The insurance card becomes void and is replaced by the actual contract when the official documents are issued.
What happens if the insurance card expires?
If you have not received your official documents and your insurance card expires, you will want to follow up with your insurance agent. You may not be insured after that date if there is a complication that you have not resolved.
What is the health insurance card payment?
Health insurance cards differ from the auto and home insurance cards discussed here. Some health care policies may require you to pay the first monthly premium before coverage begins. In this case, the first monthly premium is the “insurance card payment.” This amount can be paid by check, electronic funds transfer, or another similar payment method.
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Source: https://www.thebalancemoney.com/insurance-binder-2645743
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