10 Things That Are Not Covered by Auto Insurance
A car insurance policy is required in almost every state in the US and most people only have it because it's the law, but that doesn't mean you should only buy the minimum required. Have you ever thought about if something accidentally happens to your car? Imagine your car being stolen or even damaged during a hurricane? Do you know what is covered with your auto insurance and what isn't? Did you ever hear of third party insurance?
When you shop for car insurance, you're offered different types of coverage. In order to protect yourself, it's recommended that you understand the different types of auto insurance. Liability coverage is required to drive legally on a public road in the U.S., except in two states. Liability coverage also covers damage caused to other people or property during a collision.
It is important to review the coverage amount for each type of auto insurance coverage and choose reasonable limits. You just don't know how much you may damage someone's car or how will be needed for medical expenses if people are injured in an accident. Higher limits may cost more upfront but they may save you even more money in the future, if any unexpected event occurs.
Even if you have full coverage, there are some items that may not be covered by an auto insurance policy. Below are claims that are often not paid by insurers, so beware! Also, make sure to get free auto insurance quotes.
Collision coverage covers damage to your car after an accident; liability auto insurance does not.
Personal Injury Protection
Also known as PIP, personal injury protection, which is required in some states, covers you and the people in your car. Liability auto insurance only covers the other driver and their passengers. It's a basic personal accident cover in case the third party motor insurance does not have the coverage to pay for medical payments.
Comprehensive Insurance Coverage
Comprehensive coverage is for theft or vandalism of your car. It sometimes covers collision with a dead animal. If you live in an area where there is much wildlife, it may be beneficial to ask your agent about this extended accident cover.
Most insurance companies exclude natural disasters or as some people say "Acts of God". If your car is damaged during a hurricane, earthquake, tornado or flood, you may not be covered. The same is true for collisions with animals, which is often not included. In some cases, comprehensive car insurance will cover you if you hit a dead animal.
Other Coverages You Can Buy:
- Mechanical or Electrical Breakdowns
- Personal Accident Insurance
Other People Driving the Car
If a family member or a friend drives your car and any accident happens, you may not be fully covered by your auto insurance policy. There are some insurance companies that only cover an accident if the person who was driving is listed in your policy, others will only cover the accident if you were in the car. Some insurers cover family members, but not friends. Still there are some, which cover any licensed driver who drives your car, but they might limit the coverage amount. It's important to check the terms in your car insurance policy to guarantee that they meet your needs.
Personal Property Inside the Vehicle
While your auto insurance may cover an accident or your car if it has been stolen, the same is not true for your personal items may have left inside your car such as a laptop, sunglasses, phone or other valuables. If those items were damaged or stolen, they will not be covered by comprehensive coverage. However, you still can make a claim under your homeowner's insurance or renters insurance policy.
Let's say you want to personalize your car and you've bought a new music system and a nice DVD screen. These items will not be covered by your car insurance policy because they are categorized as personal items. There is the option to buy an additional supplemental insurance (special equipment coverage), but make sure this add-on car insurance doesn't exceed the value amount of the accessories.
If you drive your car for business purposes, for example transporting things for work and you accidentally get into an accident, you will not be covered under your regular auto insurance policy. For that, you'll need to acquire commercial vehicle coverage. The same is valid for ridesharing, or driving for Uber or Lyft. Your insurance company will not cover you while you are driving for fares, so you'll need a rideshare insurance policy to be covered during that period of time. The standard auto policy covers your commute to and from work, not for work.
All cars need maintenance over time and it's a cost already expected by the car's owner. So all the repairs resulted from wear and tear (defined as natural damage expected to occur over time with regular driving) or maintenance are not covered by the car insurance policy.
Driving a Different Car
An auto insurance policy follows the car and not the driver, since it's listed with a specific vehicle and you can only make a claim for that car. That means that if you drive a different car and get into an accident, your policy won't cover you. If you have a non-owner insurance policy or if that car is already on another insurance policy, you should be covered.
There are some insurance companies that may ask you to exclude specific drivers from your policy. For example, if you live with someone who has a DIU on their record, you may prohibit that person for using your car and avoid higher insurance prices by listing them as an excluded driver. If that person gets into an accident while driving your car, however, the insurance company will refuse to pay the claim.
Rental Car Reimbursement
Consider a scenario in which your car gets damaged during an accident and you need a car while your car is being repaired. Do you know if the rental is covered by your policy? Many insurance companies cover rental cars, but there are some that don't, so make sure to check before buying the insurance policy.
About 13% of drivers in the United States are uninsured, and that percentage may be even higher, depending on which state you live in. Imagine yourself being hit by someone who doesn't have an insurance policy? If that happens, you may need to pay for all the damages to your car and your medical bills. This is where uninsured/underinsured motorist comes in. Your standard policy may not cover you otherwise.
Third Party Property
Pay Attention to Details
Although your policy has a nice coverage, auto insurance can sometimes be tricky. Here are some items that you still need to pay attention to, in order to guarantee you get full coverage.
Report the accident right away: If you were in an accident and your car was totaled or even if it has been stolen, make sure you report the incident to the police before you miss the deadline. Otherwise, your insurance company may refuse to pay the claim.
Repairs and deductibles: Insurance companies normally charge you a deductible when you file a claim and this can vary from $100 to $2000, it depends on how much you choose when you bought the policy (the most common deductible amount is around $500). If your vehicle was damaged during an accident and will cost you around $400 to repair and your deductible is $500, this would not be interesting for you to make a claim.
Illegal activity: Driving with a suspended license or while under the influence of drugs and alcohol can result in your insurance company denying an accident claim.
Exotic or performance cars: If you drive an exotic car or one that is considered a performance car, like a Ferrari, you'll need to buy specialty insurance (like Classic Car Insurance). This kind of vehicle is more expensive and also has higher costs when a repair is needed. However, it's driven far less than a car used for commuting to and from work. You may not have proper coverage with a standard auto policy.
Medical bills: Check to see if your policy includes medical bills for injuries to you and your passengers if you are at fault in an accident.
Fraudulent claims: If for any reason, the insurance company believes your claim is fraudulent, for example, if you pretend your car was in a hit-and-run accident and it wasn't, they will refuse to pay the claim and may drop you for committing fraud. You'll have a hard time getting insured by another company if that happens.
Getting Low Car Insurance Rates
You may now understand why the Insurance Information Institute suggests buying more than bodily injury liability and property liability on a motor insurance policy. You can get a comprehensive or bundled plan at an affordable price by just entering your zip code below for a free car insurance quote and consult.
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