Car insurance can be a difficult avenue to navigate with so many policies available. Knowing what a policy does and does not cover can be tedious to understand. Many policyholders often have questions about what coverage their policy has to offer. What are some of the typical questions they have?
3 Commonly Asked Questions About Car Insurance Policies
1. Can A Friend Legally Drive Your Vehicle and Be Covered?Â
In New York, an auto insurance policy is placed on the car, not the driver. If you allow someone to drive your vehicle, they will be covered by your insurance. However, you need to make sure you understand that they are not just borrowing your car but the insurance too.
For instance, you live in Albany and allow a friend to drive your car for a short time but they get into an at-fault accident (an accident they caused) that results in property damage and injury.
- Your Albany NY car insurance will pay for the liability coverage to compensate the victims.
- Your insurance’s property damage coverage handles the property damage to whatever was damaged. Your insurance’s collision coverage will take care of your vehicle.
The problem is when the coverage you have on your insurance isn’t enough to cover the physical damage or the injury costs. While the friend’s own insurance policy can pick up the tab, it may not be enough. This is when you become legally liable to cover the remaining costs.
And, without collision coverage, the cost to repair your vehicle is your own, not the insurance.
2. Should You Have More Liability Coverage Added to Your Insurance Policy?
Think of it this way: if you have more to lose, you have more you need to protect. Liability protection keeps you from being financially liable for causing injury to another person in a vehicle accident. As you know, injuries can result in substantial monetary lawsuits.
If the police find that you are at fault for an accident that causes traumatic injury or death, you could be sued for millions of dollars. If you only have $25,000 or $100,000 for coverage on your insurance, you could end up paying out of pocket.
Instead of that scenario, add more liability coverage to your policy. It’s best to go with a $250/500k policy with a $1 million minimum umbrella for your home and auto.
3. Is Rental Coverage Necessary On Your Auto Insurance?
Renting a car is not cheap. You should decline any rental car insurance offer if your policy already includes it or if you are a driver on a policy that includes suitable collision, liability and comprehensive coverage because the personal policy you have goes with the rental. This is especially true for drivers with New York State insurance.
If your insurance is just liability, you will want to get physical damage coverage for your rental. Failure to do so and having an accident mean you are entirely responsible for the cost of repairs.
Bear in mind that the majority of New York insurance companies will not be transferable beyond the rest of the U.S. or Canada. If you are going to rent a car outside the U.S., you should accept the rental company’s policy for their cars.
