If you have ever purchased a home or vehicle, you may have been asked to obtain a certificate of insurance. A Certificate of Insurance, or COI, is a document that shows that your insurance policy covers the vehicle or the property in question, without having to produce a copy of the entire policy contract. It lists essential policy details, such as the vehicle/property insured, the coverages, and any third party interests that the insurance policy names.
What makes a COI unique
A Certificate of Insurance differs from an ID card in that an ID card is typically used only for vehicle policies and is far less detailed than a COI. Certificates of Insurance are also different from a copy of your policy in that the policy is much more thorough than a COI. Certificates of Insurance are typically a more convenient size than your insurance policy, the size of a single page or smaller, and can be more easily produced. Certificates of Insurance are a happy medium between the ID cards and a copy of the policy in regard to the amount of information provided, but another significant difference is that most of the time they do not come directly from your insurance carrier. Insurance agents are authorized to issue COIs on behalf of the insurance carrier manually, and are often required to do so.
Purpose of a COI
Most often, a third party who wants to ensure that you have the coverage that you say you do will request a Certificate of Insurance. If you have a lienholder or additional insured on the policy, the document will list their names as well as yours. For those third parties with an interest in your property or vehicle, it is a way for them to quickly verify that your policy aligns with their requirements. A Certificate of Insurance may seem like a better alternative than relying on the numerous pages of your insurance policy to show your coverage. However, there is a caveat to its convenience.
A Certificate of Insurance is meant to be informational only. It is not a legally binding document and does not guarantee what an insurance policy will or will not cover. Another downside to Certificates of Insurance is that individuals can easily fabricate them. Human error also plays a factor since the COIs are often manually created by an agent.
While a Certificate of Insurance is a fantastic tool when it comes to providing proof of your coverage, you should never rely on them as the sole method by which you review the specifics of your insurance policy. Instead, if you want to ensure that your coverage matches your needs, review your insurance policy first. If you have a good understanding of insurance, you should be able to find the information you are looking for just by reading your copy of the policy. If you can't locate the answer you're looking for, or don't understand the answer that you find, contact your Agent. They are licensed in insurance for that very reason and can clarify any questions you have about your policy. Don't let a lack of understanding keep you from the coverage that you need.
Not sure if you have a COI? Don't know how where your COI is? Call Skyline Risk Management, Inc. at (718) 267-6600 for help obtaining your COI.