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While you’ve had your car insurance policy for years, you may never have paid much attention to it unless you have been in a collision. Unfortunately, not reading your fine print and understanding your insurance coverage can slap you in the face at a stressful time, say when your car is totaled in an accident.
Pay attention to these commonly assumed ideas and see if you know the truth about your car insurance policy.
1. I automatically get a rental car paid for by my insurance company. If your car is damaged in a car accident, you’ll probably need a rental car to get around in while your car is being repaired. Unfortunately, it’s not a given service with most auto insurers. You can, however, purchase rental car reimbursement coverage to pay for it. It is extra on your policy. Determine whether the additional cost added to your policy would be cheaper than renting a car if you need one for a few days after an accident.
2. My policy covers hit-and-run accidents and uninsured motorists. It might and it might not. You have to elect for uninsured motorist coverage, so log into your vehicle insurance account online and see if you’re covered in the event someone hits you and leaves or else does not have appropriate car insurance coverage.
3. My insurance covers me no matter what I drive. Typically a car insurance policy insures a vehicle, regardless of who is driving. If your sister is in your car and wrecks it, your insurance will pay for it (and your insurance may raise your rate if it’s not the first accident this car has been in).
4. Any customizing I do to my car is automatically covered. If you trick out your car with a fancy spoiler, new paint job, or extras, you’re not necessarily covered. Check with your policy to make sure, but many insurers require you to purchase an add-on for any custom work.
5. My insurance will pay for my towing. If you’re in an accident and your car has to be towed, your car insurance won’t pay for the towing unless you have towing added on to your policy. It’s just a few dollars a month, and it might make a bad situation a little bit easier.
6. If my phone is stolen out of my car, my auto insurance will pay for a new one. Typically personal property stolen out of a car is not covered by policies. However, if your car was stolen, you may be able to claim the items that were inside it when it was stolen and receive compensation for them in that scenario.
7. If my car is totaled, my auto insurance will pay off my loan. Only if you have gap coverage. Otherwise you may find yourself without a vehicle and with a big auto loan to pay off. Gap insurance, though, will pay off whatever you still owe if your car is totaled in an accident.
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