A veil seems to cover the issue of auto insurance, ensuring that most people remain in darkness. If you feel that way, as if this is something you will never truly understand because the gatekeepers (insurance companies and their agents) seem to give out information piecemeal, worry not. In this article, I am going to examine some of the things that auto insurance does not cover. The more you learn, the better equipped you will be to navigate these waters.
So what doesn’t auto insurance cover?
1. Personal Possessions in your Car
In the case of theft, vandalism, falling objects from the sky, weather damage, and other non-accident related events, comprehensive coverage will cover your losses. However, it will not cover any personal belongings you may have in your vehicle that get damaged or stolen.
2. Your Car Loan when your Vehicle gets totaled
When an accident destroys your car so badly that the cost of repairs exceeds the car’s value, your car gets totaled. This can be devastating if you had bought it on loan. Though the insurance company will reimburse you the car’s value, it will not pay for your loan. And even the money they give you will be less than you need if you factor in depreciation and the company’s deductible. Take out gap insurance to solve this problem: it pays the difference between your loan balance and the insurance claim check.
3. Custom Parts and Equipment
Auto insurance companies won’t cover any damage caused to custom parts and equipment you add to the car after purchase. Examples of these parts: TVs, DVDs, custom seats, custom rims, grills, wheelchairs and other modifications you put in to accommodate persons with disabilities. However, you can take out an optional policy for customized parts and equipment.
4. Members of your Household who you haven’t Listed on the Policy
The insurance policy will only cover the members of your household you list on the policy. Other members of your household not listed will not be covered, no matter how close they are to you. List all drivers license owning members of your household, including roommates.
5. Cars you don’t own
Most insurance companies will not cover you if you have an accident while driving a car that does not belong to you. Some policies will cover you when driving cars belonging in your household. Have a conversation with your insurance agent to find out where your company falls on this issue.
There are many things that you think your insurance policy will cover which it actually won’t. Don’t learn from experience. Do your research. This will arm you to make the best decisions for you and your family.