What Doesn’t My Insurance Cover?
You're legally required to carry car insurance, so you may purchase a plan dutifully without giving it much thought. When something goes wrong, your first reaction is often to turn to your insurer for help. Unfortunately, there are a host of situations where your insurance company will turn away, leaving you to handle the aftermath on your own.
Full Rental Repairs
Though you have adequate insurance coverage to drive a rental car under your regular car insurance plan, there are several areas that are left uncovered. If you get into an accident in a rental car, your insurance company may not offer the same reimbursement for this vehicle that it would provide for your own car. If the rental is out of commission during repairs, the rental company may charge you as though you're still using the vehicle for every day that it's not on the lot. This won't fall under the umbrella of your car insurance coverage, and can add up quickly.
The Items Inside Your Car
Image via Flickr by tylertate
Your insurance coverage typically applies to the bare bones of your vehicle and excludes everything else. If you make modifications to the car, adding a stereo or other enhancements, these aren't automatically covered by your plan. You'll need to upgrade your coverage to make sure they're included.
You'll also find that any items you leave in your car are outside your insurance plan's purview. If the car itself is stolen, you have coverage. If the purse you left inside disappears, you're out of luck.
Other Drivers
You might let friends and family borrow your vehicle without a thought, but it's important to note that these drivers aren't always covered. An unusual rule comes into play here. If you let someone outside your household use your vehicle on an infrequent basis, they're probably covered by your plan. If someone lives in your household, however, they need to be listed on your insurance policy to enjoy the same coverage when they're behind the wheel.
The Entirety of Your Loan on a Totaled Vehicle
If your car is completely totaled in a wreck, you might turn to your insurance company hoping for reimbursement. Unfortunately, you may not get the total sum. Your insurance will typically pay you the wholesale price that you would have gotten from a dealer. Depending on the amount and interest of the original loan, this could leave you with additional payments to make to your lender, even though the vehicle is no longer in your possession.
Damage from Mother Nature
Check the exclusion list on your insurance policy carefully. Many policies refuse to cover particular "acts of God." This may include floods, earthquakes, hail, and tornadoes. You might also find that unpredictable critters are excluded from your coverage as well. This means that the extensive damage you could incur from a collision with a deer will fall well outside your coverage.
If you're uncomfortable with the gaps in your car insurance coverage, you can fill them with a plan like Carefree Auto. This will give you protection for many of the little things that are otherwise excluded.
