UPDATED: Mar 13, 2020
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Determining if your are covered in rare situations can be a fuzzy subject unless you read through the terms and conditions of your policy. The only way to really know when you are covered and when you are not is to go through your auto insurance policy with a fine-toothed comb, or even better, pay for a lawyer to look over your policy.
But who has the time for that?
Of course, we all need car insurance to drive. But all policies and companies aren’t created equal. We’d like to remind you that every auto insurance company is different and has their own quirks and sets of terms. This guide simply covers the norm, which actually isn’t all the common.
What applies to Insurance Company A, won’t necessarily apply to Insurance Company B. To get the best information regarding your policy, it is always best to contact your auto insurance provider directly. Most companies have fairly informative websites that can help answer your questions as well.
But before you contact your insurance company to get the low-down, let’s take a look at a few different scenarios that we are often asked about:
Am I Covered When I’m Outside the United States?
Whether or not you are covered when you drive in the United States all depends on your particular policy. Most insurance companies will only cover you in the continental US. Sometimes they will extend coverage to Canada and Mexico. Usually, they will cover you in Puerto Rico, and nine times out of ten they will cover you in the non-continental states (Alaska and Hawaii).
Some auto insurance providers to offer international policies. If you are planning on driving outside the US frequently you should either get an auto insurance policy in the appropriate country or get extended coverage from your current provider.
Am I Insured When My Friend is Driving?
This is kind of a complicated situation. If your friend wasn’t at fault, and the other party does in fact have auto coverage, the other party will be responsible for paying.
If your friend is at fault, your friends auto insurance should cover the damages. Unfortunately the chances of them having auto insurance are less likely if they are borrowing your car. If this is the case they will have to pay damages out of pocket.
So to summarize the answer to the question, no it doesn’t cover your friend, but you aren’t responsible.
The same goes for if you are borrowing a friends car. Even though it is not your car, you are still responsible for any damage done.
What Happens When a Tree Falls On My Car?
In the case that a tree falls on your car, flooding causes water damage, or if your car gets swept up in a tornado, you certainly aren’t at faults, but you better hope you have comprehensive auto coverage.
Basic policies come only with collision coverage which only covers costs in the case of a collision, hence the name.
If a situation occurs where your car is damaged, but not involved in a collision with another vehicle or other property, the damages will only be covered if you have comprehensive coverage.
I Hit a Parked Car?
If you hit a parked car in a parking lot, then check to verify if there’s any damage. In some cases, with a minor bump, there’s no damage to either vehicle and you can ignore it (after leaving a note or speaking with the other driver). However, for a larger bump with more damage, you should contact your insurance company as soon as possible so they can expedite the claims process. Your property damage liability coverage (required on all insurance plans) will pay for repairing damage to the parked car. Your collision coverage (optional), meanwhile, will cover the costs of repairing your own car after you pay for your deductible.
My Car is Damaged by Hail?
If your car is damaged by hail, then hail damage is unlikely to be covered under an ordinary liability or collision-only car insurance policy. If you have comprehensive insurance, however, then hail damage is almost certainly covered – similar to if a tree falls on your car.
I Rent a Car?
Your ordinary car insurance policy should cover you while driving a rental vehicle. If you wreck a rental car while driving it, for example, then your car insurance policy should cover the costs of repairing the vehicle. However, these won’t be the only charges: rental car companies may also charge you for loss of use. You might get charged for the income lost by the rental company by not having the car for 45 days, for example, and your insurance company will not cover this cost. Talk to your insurance agent to make sure you understand your rental car insurance coverage.
I Make a Claim on My Collector Car?
Standard car insurance policies define the value of your car as “actual cash value”, which is the replacement cost minus depreciation. Collector cars, however, don’t depreciate over time: they appreciate in value. That’s why you need collector’s insurance, a special type of insurance for collector cars. Most major insurance companies offer some type of specialized insurance for collector cars.
Final Thoughts On Insurance Coverage
Remember that not all insurance policies are the same. While your neighbor’s insurance might cover damage to his car caused by next week’s tornado, your insurance might not! The best thing to do to make sure is to give your insurance agent a call (just to be safe). If there are additional coverage types that you would like to add, he/she will be happy to assist you.