What Auto Insurance Doesn’t Cover

Fran Majidi
July 26, 2019

Auto insurance doesn’t pay for repairs to your cause caused by wear-and-tear. It also doesn’t pay for maintenance costs for your vehicle, like oil changes and fluid changes. A standard insurance policy with state minimums also won’t cover you if you are in an accident with an uninsured driver. You may end up paying for losses out of pocket, unless you have uninsured/underinsured driver coverage.

If your belongings are stolen out of your car, you’re not covered by auto insurance. However, you may be able to file a claim on your renters or home insurance policy. There are also options to buy special equipment coverage or a rider to cover custom parts. Some of the things that are not covered by auto insurance are rims, sound systems and other after-market add-ons.

If your roommate or teenager has an accident in your car, they may not be covered, especially if they are not on your policy or are excluded on the policy. Make sure to add on everyone who regularly uses your car just to be safe, even if it raises your premiums. It’s still less expensive than having to pay for an accident out of pocket.

Another way you may not be fully covered is if you owe more on your car loan than what your car is worth. If the accident was your fault, you are only paid out in the event of a collision if you have collision coverage. Even then, you only get paid for what the car is worth, which won’t necessarily cover the loan you have on the car. In order to prevent paying for this gap you can buy gap insurance.

Car rental is also not a guaranteed coverage, not even if you’re covered for repairs on the car. You may have to pay for costs out-of-pocket unless you have supplemental rental car reimbursement coverage.

It’s also important to understand that comprehensive auto insurance does not cover everything. In fact it only covers losses not caused by a collision and it still won’t cover belongings or after-market equipment. For a special paint job or an expensive sound system you’ll need a rider.

Natural disasters like earthquakes, hurricanes and floods are not usually covered by liability insurance. However, you are covered for the aforementioned natural disasters and hail storms if you have comprehensive insurance.

You’re not covered by your personal auto insurance when using your car for business reasons. Car insurance also follows the car more than it does the driver so don’t assume you’re covered if you’re driving another car than the one listed on your insurance policy. You also may or may not be covered if your car is in an accident with someone other than you behind the wheel. Each insurance company has a different policy. Some insurers will cover friends and family members who don’t live with you while others do not so it’s best to ask questions. Keep in mind, too, that if you are in an accident and do not report it to the police, your claim may be denied entirely.

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