Surprising Things That May Not Be Covered by Car Insurance

Car insurance may be used to compensate for damage caused by accidents, theft, or vandalism, depending on the particular type of insurance you purchase and your specific policy. Regardless of how comprehensive your car insurance is, it may not cover all you believe it does. That’s why it’s so important to read your policy carefully and understand what types of damage are and aren’t covered. Unanticipated coverage gaps can give you a nasty surprise and cost you dearly, so it pays to know.

Each policy is different, but the following are a few things that are often not covered by personal auto insurance. Again, read your policy or call your insurance agent if you have any questions.

Custom Parts

Most automobile insurance plans do not include coverage for the expense of restoring non-standard, custom auto parts. You may need extra insurance to cover these parts — if you drive a luxury or customized car, this can be a good idea. The extra insurance will prevent you from having to pay for potentially expensive parts out of pocket. Special auto parts that may be excluded from your policy include the following:

· Aftermarket parts (i.e., parts that aren’t made by the original equipment manufacturer)

· Aesthetic improvements

· Wheelchair lifts as well as other accessibility adaptations for people with disabilities.

Talk to your insurer to see about purchasing an add-on to your policy to cover these and any other types of modifications and aftermarket parts.

Classic or collectors’ cars

Collectors’ automobiles and classic cars are growing in value, rather than decreasing, as most automobiles do. The term “classic car” is a bit subjective and definitions vary among insurers, but according to the Insurance Information Institute, any car is a classic car if it’s at least 25 to 30 years old.

You risk losing a lot of money if you only insure your classic car with just the standard liability or collision coverage. As a collector, you’d want to add on to your policy to protect your investment and cover the vehicle’s full value.

Note that with standard car insurance, your coverage is based on the actual cash value of the vehicle, which includes depreciation (loss of value over time). In contrast, classic car insurance is based on the value of the car as agreed upon by the owner and the insurer. If you purchase this type of insurance, also know that it may come with certain restrictions. For example, you may void the policy if you drive the vehicle on a daily basis, or store it in an unprotected, uncovered location outdoors.

Using Your Vehicle for Business Purposes

Standard personal auto insurance covers commuting and some occasional business use of your vehicle, like driving to meet a client once in a while. However, if you are routinely using your car for business purposes, your personal auto insurance policy may not recognize this as an acceptable use and may refuse to provide coverage in an accident, or even cancel the policy.

If you own a small business and primarily use your vehicle for business purposes — for example, making deliveries to customers, transporting tools and equipment to jobs, or traveling to remote work locations — you probably need commercial auto insurance. This type of insurance usually provides more liability coverage to protect both you and your business from lawsuits.

Personal Items

Comprehensive car insurance policies will protect your car if it is stolen or damaged, but not the personal valuables in your vehicle. If someone breaks into your car and steals your laptop or your iPhone, for example, you won’t be able to submit a claim for these valuables to your auto insurance provider, since auto policies don’t cover theft of these items, even though the theft occurred in your car.

For this reason, the National Insurance Crime Bureau recommends that you always secure your car and store any items, particularly GPS navigation systems and other valuable electronics, in the trunk or out of sight. If you file a police complaint, any items stolen from your car may be covered by your homeowners’ or renters’ insurance. That is, of course, after you have met your deductible.

Weather Damage

If you only have basic liability insurance or collision coverage, damage to your car from wind, floods, hurricanes, hail, and other weather is not covered. Comprehensive coverage generally covers this kind of damage from natural disasters, however. If you live in an area that routinely sees extreme weather like major storms, comprehensive coverage is a good idea.

Drivers Not Listed on Your Insurance Policy

There’s a lot of variation among policies when it comes to the question of covering drivers other than you, the policyholder. Some policies only cover accidents when you or others named on the policy are driving, while others will cover it if someone else is driving, but you are a passenger in the car at the time.

Other policies are more lenient and will generally cover any driver, even if they aren’t listed on the policy, as long as you as the policyholder gave them permission to drive your car — for example, you gave them the keys or verbally told them they could drive. However, your personal auto insurance generally will not cover other drivers if you’re renting out your car and someone is paying you for its use.

Conclusion

Plenty of people assume that any kind of mishap in their car — damage, theft, an accident, or whatever else — is covered by their auto insurance. However, this isn’t always the case. Make sure to read your policy closely, and don’t be shy about asking your insurance provider to clarify the limits of your policy and explain your coverage. They’ll be happy to assist you, and to recommend other policies and add-ons that can get you the coverage you need.