Get the Coverage You Need: Understanding Car Insurance
Key Takeaways:
- Car insurance helps pay to fix your car if it’s damaged in an accident or another covered incident.
- Buying car insurance is almost always required if you own a car, but the level of coverage is up to you.
- Most insurance companies let you tailor your car insurance policy to meet your needs and budget.
Depending on the policy you choose, car insurance can provide financial protection in the event your car is damaged or stolen, you’re injured in an accident, or you’re at fault for an accident that causes bodily injury or property damage to third parties. It can also help you meet any minimum coverage requirements mandated by your state or required by a lender.
How car insurance works specifically can depend on the laws of your state, which coverages you carry, and your insurer.
On this page we’ll cover some of the most common types of car insurance coverage and offer some tips for deciding how much coverage you need and finding the most affordable car insurance available to you.
- Car insurance helps pay to fix your car if it’s damaged in an accident or another covered incident.
- Buying car insurance is almost always required if you own a car, but the level of coverage is up to you.
- Most insurance companies let you tailor your car insurance policy to meet your needs and budget.
Depending on the policy you choose, car insurance can provide financial protection in the event your car is damaged or stolen, you’re injured in an accident, or you’re at fault for an accident that causes bodily injury or property damage to third parties. It can also help you meet any minimum coverage requirements mandated by your state or required by a lender.
How car insurance works specifically can depend on the laws of your state, which coverages you carry, and your insurer.
On this page we’ll cover some of the most common types of car insurance coverage and offer some tips for deciding how much coverage you need and finding the most affordable car insurance available to you.
Do I Need Car Insurance?
If you drive or own a car, you’ll likely need car insurance. Some form of car insurance is mandatory in most states, though the legal requirements and minimum limits vary by state.
Most require coverage for third-party bodily injury and property damage liability claims if you are at fault in an accident and injure another driver or their passengers or cause damage to someone’s property, such as a fence or mailbox. Medical coverage for you and your passengers may also be required in the form of personal injury protection (PIP) or medical payments (MedPay) coverage.
Physical damage coverages, such as comprehensive and collision, are typically optional, but they may be required if you finance or lease your car. These coverages provide first-party property protection for your vehicle if it’s damaged, and you’re responsible for paying the repair or replacement costs.
If you drive or own a car, you’ll likely need car insurance. Some form of car insurance is mandatory in most states, though the legal requirements and minimum limits vary by state.
Most require coverage for third-party bodily injury and property damage liability claims if you are at fault in an accident and injure another driver or their passengers or cause damage to someone’s property, such as a fence or mailbox. Medical coverage for you and your passengers may also be required in the form of personal injury protection (PIP) or medical payments (MedPay) coverage.
Physical damage coverages, such as comprehensive and collision, are typically optional, but they may be required if you finance or lease your car. These coverages provide first-party property protection for your vehicle if it’s damaged, and you’re responsible for paying the repair or replacement costs.
Since car insurance coverages can function differently between tort states and no-fault states, it’s important to discuss specifics with a licensed insurance agent or an insurance company.
Since car insurance coverages can function differently between tort states and no-fault states, it’s important to discuss specifics with a licensed insurance agent or an insurance company.
Liability insurance
Liability coverage pays for costs associated with an accident for which you’re found legally at fault. Liability insurance generally includes two types of coverage:
- Bodily injury. This covers the expenses related to injuries or death for others (e.g., another driver, their passengers, or a pedestrian) when you are at fault.
- Property damage. This covers the expenses for repair or replacement of others’ property (e.g., fencing, a home, etc.) you damage when operating your vehicle.
Most states require drivers to carry a minimum amount of liability coverage before they can register and operate a vehicle in that state. You can find out how much liability coverage you need by visiting your state’s Department of Motor Vehicles (DMV) or by visiting our Auto Insurance by State guide.
Liability coverage pays for costs associated with an accident for which you’re found legally at fault. Liability insurance generally includes two types of coverage:
- Bodily injury. This covers the expenses related to injuries or death for others (e.g., another driver, their passengers, or a pedestrian) when you are at fault.
- Property damage. This covers the expenses for repair or replacement of others’ property (e.g., fencing, a home, etc.) you damage when operating your vehicle.
Most states require drivers to carry a minimum amount of liability coverage before they can register and operate a vehicle in that state. You can find out how much liability coverage you need by visiting your state’s Department of Motor Vehicles (DMV) or by visiting our Auto Insurance by State guide.
Uninsured motorist coverage
Uninsured motorist (UM) coverage provides financial protection if you are hurt in an accident and the other driver doesn’t have car insurance. Depending on where you live, this coverage may extend to cover property damage. Uninsured motorist coverage also pays if you are the victim of a hit-and-run. Your state may require you to carry a minimum amount of uninsured motorist coverage.
You may also want to consider underinsured motorist (UIM) coverage, which typically pays the difference between your expenses and the policy limit of the at-fault driver when their limits are insufficient. However, in some states, underinsured motorist coverage is not applicable unless your underinsured motorist limits are greater than the liability limits of the other driver.
Uninsured motorist (UM) coverage provides financial protection if you are hurt in an accident and the other driver doesn’t have car insurance. Depending on where you live, this coverage may extend to cover property damage. Uninsured motorist coverage also pays if you are the victim of a hit-and-run. Your state may require you to carry a minimum amount of uninsured motorist coverage.
You may also want to consider underinsured motorist (UIM) coverage, which typically pays the difference between your expenses and the policy limit of the at-fault driver when their limits are insufficient. However, in some states, underinsured motorist coverage is not applicable unless your underinsured motorist limits are greater than the liability limits of the other driver.
Personal injury protection (PIP)
This no-fault insurance coverage pays the medical expenses for you or your passengers if you are injured in an accident, regardless of who is at fault. Personal injury protection (PIP) may also apply if you’re riding a bike or walking and are hit by a vehicle.
In some cases, PIP coverage may reimburse you for lost wages and expenses for tasks you can’t perform while recovering, such as house cleaning.
PIP is required in some states and is optional in some others. As always, check with your state’s DMV to determine if PIP is available in your state and if you are required to carry it.
This no-fault insurance coverage pays the medical expenses for you or your passengers if you are injured in an accident, regardless of who is at fault. Personal injury protection (PIP) may also apply if you’re riding a bike or walking and are hit by a vehicle.
In some cases, PIP coverage may reimburse you for lost wages and expenses for tasks you can’t perform while recovering, such as house cleaning.
PIP is required in some states and is optional in some others. As always, check with your state’s DMV to determine if PIP is available in your state and if you are required to carry it.
Medical payments coverage (MedPay)
Like personal injury protection, medical payments (MedPay) coverage pays the medical bills for you and your passengers for injuries sustained in a car accident, regardless of who is at fault. However, unlike PIP coverage, MedPay does not cover any additional or related expenses, like lost wages.
MedPay is required in some states and optional in others. It is not available in all states.
Like personal injury protection, medical payments (MedPay) coverage pays the medical bills for you and your passengers for injuries sustained in a car accident, regardless of who is at fault. However, unlike PIP coverage, MedPay does not cover any additional or related expenses, like lost wages.
MedPay is required in some states and optional in others. It is not available in all states.
Collision coverage
Collision coverage pays for repairs if your car is damaged during a car accident or if it collides with another object like a building or tree, even if you’re at fault. It may also cover damage from potholes.
Collision coverage pays for repairs if your car is damaged during a car accident or if it collides with another object like a building or tree, even if you’re at fault. It may also cover damage from potholes.
Comprehensive coverage
Comprehensive coverage, or other than collision coverage, pays for damage to your car that occurs during an event that’s not a car accident or collision with another object. Examples of covered losses include fire damage, hail damage, damage from falling objects, a cracked or shattered windshield, vandalism, or damage from an animal. It also reimburses you if your car is stolen.
Comprehensive coverage, or other than collision coverage, pays for damage to your car that occurs during an event that’s not a car accident or collision with another object. Examples of covered losses include fire damage, hail damage, damage from falling objects, a cracked or shattered windshield, vandalism, or damage from an animal. It also reimburses you if your car is stolen.
To ensure you have the coverage you need, many auto insurance companies offer optional insurance add-ons for purchase, including:
- Roadside assistance. If you have a flat tire, need a tow, or are locked out of your car, this coverage reimburses you for services to get you moving again.
- New car replacement. This type of coverage will pay to replace a totaled vehicle with a new one of the same make and model. Coverage is typically limited to relatively new vehicles – two years old, for example – but the cutoff varies by insurer.
- Mechanical breakdown insurance. If your car breaks down and your manufacturer’s warranty doesn’t cover the repairs, this coverage will.
- Rental reimbursement. This add-on will cover the cost of a rental vehicle while your car is undergoing repairs during a covered claim. It does not apply when your car is in the shop for routine maintenance.
- Rideshare insurance. If you drive for a ridesharing company, this insurance provides coverage if you’re in an accident while working. Personal auto insurance policies typically exclude coverage for any business exposures.
- Gap insurance. If your car is deemed “totaled” following an accident and you owe more on your car loan or lease than the insurance company will pay, gap insurance will pay the difference.
To ensure you have the coverage you need, many auto insurance companies offer optional insurance add-ons for purchase, including:
- Roadside assistance. If you have a flat tire, need a tow, or are locked out of your car, this coverage reimburses you for services to get you moving again.
- New car replacement. This type of coverage will pay to replace a totaled vehicle with a new one of the same make and model. Coverage is typically limited to relatively new vehicles – two years old, for example – but the cutoff varies by insurer.
- Mechanical breakdown insurance. If your car breaks down and your manufacturer’s warranty doesn’t cover the repairs, this coverage will.
- Rental reimbursement. This add-on will cover the cost of a rental vehicle while your car is undergoing repairs during a covered claim. It does not apply when your car is in the shop for routine maintenance.
- Rideshare insurance. If you drive for a ridesharing company, this insurance provides coverage if you’re in an accident while working. Personal auto insurance policies typically exclude coverage for any business exposures.
- Gap insurance. If your car is deemed “totaled” following an accident and you owe more on your car loan or lease than the insurance company will pay, gap insurance will pay the difference.
What Car Insurance Doesn’t Cover
There are some things car insurance won’t cover – even if you have a comprehensive policy.
- Personal property inside the car. If you leave cash, jewelry, electronics or other valuables in your car and they’re stolen, don’t expect your car insurance provider to cover it (although your homeowners or renters insurance might).
- Injury to a pet inside the car. Unfortunately, if you’re driving with Fido and they’re hurt or injured in an accident, your car insurance won’t be paying the vet bills.
- Normal wear and tear. Car insurance doesn’t typically cover maintenance and replacement costs, such as oil changes or new spark plugs.
- Modifications, accessories, and aftermarket add-ons. If you’ve added a spoiler, rims, or made other modifications, your insurance won’t pay to replace them (unless you’ve added a special rider to your policy).
- Intentional damage. Don’t damage your car on purpose, hoping for an insurance payout – it won’t be covered, and you could even lose your policy.
- Criminal use. Car insurance won’t cover an accident or other damage that occurs while using the car for criminal activity.
- Racing use. You also shouldn’t expect your policy to cover damage incurred while drag racing. If you want to participate on the racetrack, look into motorsports policies.
- Ridesharing. Drivers who use their car for Uber, Lyft, or food delivery may find their insurance won’t cover accidents that occur when they’re “on the clock.” However, some insurers offer this type of coverage as an add-on.
- Unlicensed or excluded drivers. If a child, an unlicensed driver, or someone who’s been specifically excluded from your policy (like a disgruntled roommate) uses your car and crashes it, don’t expect your insurance company to pay for repairs.
There are some things car insurance won’t cover – even if you have a comprehensive policy.
- Personal property inside the car. If you leave cash, jewelry, electronics or other valuables in your car and they’re stolen, don’t expect your car insurance provider to cover it (although your homeowners or renters insurance might).
- Injury to a pet inside the car. Unfortunately, if you’re driving with Fido and they’re hurt or injured in an accident, your car insurance won’t be paying the vet bills.
- Normal wear and tear. Car insurance doesn’t typically cover maintenance and replacement costs, such as oil changes or new spark plugs.
- Modifications, accessories, and aftermarket add-ons. If you’ve added a spoiler, rims, or made other modifications, your insurance won’t pay to replace them (unless you’ve added a special rider to your policy).
- Intentional damage. Don’t damage your car on purpose, hoping for an insurance payout – it won’t be covered, and you could even lose your policy.
- Criminal use. Car insurance won’t cover an accident or other damage that occurs while using the car for criminal activity.
- Racing use. You also shouldn’t expect your policy to cover damage incurred while drag racing. If you want to participate on the racetrack, look into motorsports policies.
- Ridesharing. Drivers who use their car for Uber, Lyft, or food delivery may find their insurance won’t cover accidents that occur when they’re “on the clock.” However, some insurers offer this type of coverage as an add-on.
- Unlicensed or excluded drivers. If a child, an unlicensed driver, or someone who’s been specifically excluded from your policy (like a disgruntled roommate) uses your car and crashes it, don’t expect your insurance company to pay for repairs.
What if you own something older … and valuable?
Say you have a 1972 Chevrolet Corvette or 1964 Porsche 356C. This requires special insurance coverage, but luckily there is a whole industry that caters to such vehicles.
Classic car insurance is a growing industry, with Hagerty as one of its most notable names. American Collectors Insurance, Grundy, and many of the major insurers offer classic car insurance.
Standard car insurance usually covers policyholders for the actual cash value of their cars, meaning that a car will be evaluated for its age, condition, and depreciation compared to similar vehicles.
A classic car owner may find that a standard policy does not provide sufficient coverage to protect their car, especially if it has been restored or customized. Car insurance companies that specialize in writing classic car policies are the best option for insuring your classic car to its full value.
Say you have a 1972 Chevrolet Corvette or 1964 Porsche 356C. This requires special insurance coverage, but luckily there is a whole industry that caters to such vehicles.
Classic car insurance is a growing industry, with Hagerty as one of its most notable names. American Collectors Insurance, Grundy, and many of the major insurers offer classic car insurance.
Standard car insurance usually covers policyholders for the actual cash value of their cars, meaning that a car will be evaluated for its age, condition, and depreciation compared to similar vehicles.
A classic car owner may find that a standard policy does not provide sufficient coverage to protect their car, especially if it has been restored or customized. Car insurance companies that specialize in writing classic car policies are the best option for insuring your classic car to its full value.
According to our analysis of insurers, the national average cost of a car insurance policy is $2,068 per year. However, your rate may be higher or lower. Car insurers factor in your age, location, driving record, vehicle type, and insurance score to determine your rate.
The cost of car insurance also depends on how much coverage you purchase and the deductible and limits you choose. The key to finding the most affordable car insurance with the best coverage for your needs is to shop around and compare quotes from at least three different insurers.
According to our analysis of insurers, the national average cost of a car insurance policy is $2,068 per year. However, your rate may be higher or lower. Car insurers factor in your age, location, driving record, vehicle type, and insurance score to determine your rate.
The cost of car insurance also depends on how much coverage you purchase and the deductible and limits you choose. The key to finding the most affordable car insurance with the best coverage for your needs is to shop around and compare quotes from at least three different insurers.
How Is Car Insurance Priced?
Several factors affect the price of your car insurance premiums. Car insurers use detailed calculations to determine their risk in insuring you; the higher the risk, the more expensive the insurance. They also base costs on your policy type, the coverage you request, and other factors, including:
- Demographics. Younger drivers tend to pay more than older drivers, and, where gender is a factor, men tend to pay more than women.
- Driving history. Drivers with one or more car accidents, previous claims, or moving violations are likely to have higher premiums.
- Credit score. Drivers with low credit scores tend to have higher premiums than those with good or excellent scores.
- Location. Where you live and work will affect your car insurance costs. Rates vary by state, city, and even neighborhood, with drivers in high-traffic, accident-prone areas often paying more.
- Vehicle type. New cars are typically more expensive to insure than old cars. Given their advanced technological features and higher value, they can be more costly to repair. In addition, the car’s safety record, safety features, and size can also influence pricing.
- Vehicle use. Drivers who don’t log many miles tend to pay less than drivers who spend a lot of their time on the road.
Several factors affect the price of your car insurance premiums. Car insurers use detailed calculations to determine their risk in insuring you; the higher the risk, the more expensive the insurance. They also base costs on your policy type, the coverage you request, and other factors, including:
- Demographics. Younger drivers tend to pay more than older drivers, and, where gender is a factor, men tend to pay more than women.
- Driving history. Drivers with one or more car accidents, previous claims, or moving violations are likely to have higher premiums.
- Credit score. Drivers with low credit scores tend to have higher premiums than those with good or excellent scores.
- Location. Where you live and work will affect your car insurance costs. Rates vary by state, city, and even neighborhood, with drivers in high-traffic, accident-prone areas often paying more.
- Vehicle type. New cars are typically more expensive to insure than old cars. Given their advanced technological features and higher value, they can be more costly to repair. In addition, the car’s safety record, safety features, and size can also influence pricing.
- Vehicle use. Drivers who don’t log many miles tend to pay less than drivers who spend a lot of their time on the road.
Average Annual Rates:
- USAA: $1,335
- Erie Insurance: $1,532
- Auto-Owners: $1,619
- Nationwide: $1,621
- Geico: $1,778
- Progressive: $1,848
- State Farm: $2,150
- American Family: $2,170
- Farmers: $3,253
- Allstate: $3,374
Are you overpaying for auto insurance? Find the cheapest insurance for you in our ranking of the Best Cheap Car Insurance Companies.
- USAA: $1,335
- Erie Insurance: $1,532
- Auto-Owners: $1,619
- Nationwide: $1,621
- Geico: $1,778
- Progressive: $1,848
- State Farm: $2,150
- American Family: $2,170
- Farmers: $3,253
- Allstate: $3,374
Are you overpaying for auto insurance? Find the cheapest insurance for you in our ranking of the Best Cheap Car Insurance Companies.
Car insurance can be expensive, but there are many ways to save money on your auto insurance, including:
- Change your deductible and/or policy limits. Raising your deductible will lower your premiums, as will lowering the limits your policy covers.
- Ask about discounts. Many people know they could receive a discount for bundling their car insurance with their homeowners insurance, but there often are many more discounts available. Ask about discounts for automatic payments, taking a defensive driving course, or being claim-free in recent years.
- Shop around. Auto insurance companies price car insurance differently, so get quotes from at least three different companies.
- Improve your credit history. Car insurers often provide better rates to drivers with good credit.
Find out what car insurance discounts you can get.
Car insurance can be expensive, but there are many ways to save money on your auto insurance, including:
- Change your deductible and/or policy limits. Raising your deductible will lower your premiums, as will lowering the limits your policy covers.
- Ask about discounts. Many people know they could receive a discount for bundling their car insurance with their homeowners insurance, but there often are many more discounts available. Ask about discounts for automatic payments, taking a defensive driving course, or being claim-free in recent years.
- Shop around. Auto insurance companies price car insurance differently, so get quotes from at least three different companies.
- Improve your credit history. Car insurers often provide better rates to drivers with good credit.
Find out what car insurance discounts you can get.
Filing a car insurance claim can be overwhelming, and each insurance company has their own process and tools in place. However, there are some things you can do to make the process easier.
- Immediately call your car insurance agent. Explain what happened, and find out what your policy covers as well as any deadlines for filing a claim.
- Gather required information. Depending on the nature of your claim, you may need to include a police report, photos of the damage, the names and information of anyone involved in the accident, and a repair estimate. Your insurer should be able to provide you with a list of information or documents you need to include.
- File a claim. You can usually submit an official claim over the phone or via your insurance company’s website or mobile app.
- Ask about a rental car. If your policy covers a rental car, find out the process for getting the car or reimbursement.
Filing a car insurance claim can be overwhelming, and each insurance company has their own process and tools in place. However, there are some things you can do to make the process easier.
- Immediately call your car insurance agent. Explain what happened, and find out what your policy covers as well as any deadlines for filing a claim.
- Gather required information. Depending on the nature of your claim, you may need to include a police report, photos of the damage, the names and information of anyone involved in the accident, and a repair estimate. Your insurer should be able to provide you with a list of information or documents you need to include.
- File a claim. You can usually submit an official claim over the phone or via your insurance company’s website or mobile app.
- Ask about a rental car. If your policy covers a rental car, find out the process for getting the car or reimbursement.
Here are three reasons that insurance companies may deny claims:
- The driver is someone who lives with you or has access to your car and is of driving age but not on your policy.
- You were using your personal car for business purposes at the time of the accident.
- The car isn’t “garaged” at your house. This isn’t about the car being in your garage literally. It means that a car is insured on your policy, but it's owned and kept at someone else's address.
Insurers will also deny claims for what could be called self-inflicted damage. That includes damage done while off-roading or at the track. And almost no auto insurance policy (or warranty, for that matter) covers wear and tear.
Furthermore, filing a fraudulent claim is illegal in all 50 states and Washington, D.C., so don’t change the date or details of an accident or occurrence hoping you’ll receive coverage for damages. You could face severe fines, criminal charges, and even imprisonment.
Here are three reasons that insurance companies may deny claims:
- The driver is someone who lives with you or has access to your car and is of driving age but not on your policy.
- You were using your personal car for business purposes at the time of the accident.
- The car isn’t “garaged” at your house. This isn’t about the car being in your garage literally. It means that a car is insured on your policy, but it's owned and kept at someone else's address.
Insurers will also deny claims for what could be called self-inflicted damage. That includes damage done while off-roading or at the track. And almost no auto insurance policy (or warranty, for that matter) covers wear and tear.
Furthermore, filing a fraudulent claim is illegal in all 50 states and Washington, D.C., so don’t change the date or details of an accident or occurrence hoping you’ll receive coverage for damages. You could face severe fines, criminal charges, and even imprisonment.
Car insurance can cover theft, but it has to be the right kind of insurance. To learn more, we spoke to Edward L. Blais, J.D., C.I.C., C.P.I.A., President of Blais Insurance in Lincoln, R.I. He helped us get a sense of what types of policies cover car theft. We also threw a series of scenarios at the car insurance expert.
“When it comes to an auto policy,” says Blais, “Theft is theft.” So the answer is yes, but it’s not quite a blanket “yes.”
In Rhode Island, theft is covered under something called “Other Than Collision.” “It used to be called comprehensive,” says Blais. Even before that, it was called Fire and Theft. In most other states, it is still called “Comprehensive.”
The only way theft would not be covered under this plan is if it could be proven that the policyholder was somehow involved in the theft of the vehicle. That’s straight-up fraud.
Typical things that comprehensive insurance covers include “Missiles, falling objects, theft, larceny, wind storm (sandblast), contact with bird or animal, mischief, fire, explosion, earthquake …” Blais says. These generally constitute your typical “Act of God” scenarios.
It’s important to note that this comprehensive level of coverage is above and beyond your basic liability insurance.
Car insurance can cover theft, but it has to be the right kind of insurance. To learn more, we spoke to Edward L. Blais, J.D., C.I.C., C.P.I.A., President of Blais Insurance in Lincoln, R.I. He helped us get a sense of what types of policies cover car theft. We also threw a series of scenarios at the car insurance expert.
“When it comes to an auto policy,” says Blais, “Theft is theft.” So the answer is yes, but it’s not quite a blanket “yes.”
In Rhode Island, theft is covered under something called “Other Than Collision.” “It used to be called comprehensive,” says Blais. Even before that, it was called Fire and Theft. In most other states, it is still called “Comprehensive.”
The only way theft would not be covered under this plan is if it could be proven that the policyholder was somehow involved in the theft of the vehicle. That’s straight-up fraud.
Typical things that comprehensive insurance covers include “Missiles, falling objects, theft, larceny, wind storm (sandblast), contact with bird or animal, mischief, fire, explosion, earthquake …” Blais says. These generally constitute your typical “Act of God” scenarios.
It’s important to note that this comprehensive level of coverage is above and beyond your basic liability insurance.
What happens when your car is broken into?
So you walk out to your car in the morning, and your car is still there, but the window is broken. Maybe you own a vehicle with a manual transmission and the thieves couldn’t drive stick, so they went after your belongings instead.
Once again, things get tricky. It depends what those things were, where they were located in the car, and how they were used by the owner.
If you had valuables in the car, such as cell phones, CDs, a purse, etc., these items are covered under the personal property section of your homeowners insurance, condo insurance, or renters insurance.
But say you have an advanced digital camera with multiple lenses (which can get quite expensive), and they are stolen from your trunk. If it turns out you use that equipment for work-related purposes, they would be covered under a commercial property policy or a special scheduled policy. Once again – special cases require a special insurance policy.
So you walk out to your car in the morning, and your car is still there, but the window is broken. Maybe you own a vehicle with a manual transmission and the thieves couldn’t drive stick, so they went after your belongings instead.
Once again, things get tricky. It depends what those things were, where they were located in the car, and how they were used by the owner.
If you had valuables in the car, such as cell phones, CDs, a purse, etc., these items are covered under the personal property section of your homeowners insurance, condo insurance, or renters insurance.
But say you have an advanced digital camera with multiple lenses (which can get quite expensive), and they are stolen from your trunk. If it turns out you use that equipment for work-related purposes, they would be covered under a commercial property policy or a special scheduled policy. Once again – special cases require a special insurance policy.
What if you have installed aftermarket parts and they are stolen?
One of the great things about car ownership is the ability to customize and personalize your ride. From specialty sound equipment to aftermarket wheels and engine upgrades, there are seemingly endless ways to modify your vehicle. But just because these parts are now on your car, it doesn’t mean they are covered together under the same policy.
“Your standard stereo is covered under the auto policy if it is stolen in the middle of the night,” says Blais. “And even many aftermarket units are covered.”
The rationale is that, in theory, most late-model cars have sophisticated stereo systems, and even the aftermarket units are on-par with the stock ones.
But if you are using an adapter connected to a portable music device, like an old iPod, that’s covered under homeowners insurance.
“If you were to take the stock wheels off the car and replace them with $5,000 wheels and tires,” explained Blais, “You won’t get comped, even under the most robust policy.”
The only way to recover the value of the wheels is if you contact the auto insurance company to write special coverage. Otherwise, you will only be compensated for the value of the stock wheels and tires.
One of the great things about car ownership is the ability to customize and personalize your ride. From specialty sound equipment to aftermarket wheels and engine upgrades, there are seemingly endless ways to modify your vehicle. But just because these parts are now on your car, it doesn’t mean they are covered together under the same policy.
“Your standard stereo is covered under the auto policy if it is stolen in the middle of the night,” says Blais. “And even many aftermarket units are covered.”
The rationale is that, in theory, most late-model cars have sophisticated stereo systems, and even the aftermarket units are on-par with the stock ones.
But if you are using an adapter connected to a portable music device, like an old iPod, that’s covered under homeowners insurance.
“If you were to take the stock wheels off the car and replace them with $5,000 wheels and tires,” explained Blais, “You won’t get comped, even under the most robust policy.”
The only way to recover the value of the wheels is if you contact the auto insurance company to write special coverage. Otherwise, you will only be compensated for the value of the stock wheels and tires.
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