9 Surprising Things Your Car Insurance Will Cover, Plus 9 Surprising Things They Won't

You might be surprised to find out what's covered under your car insurance policy. Here's what you need to know.
Last updated Oct 27, 2021 | By Lindsay Frankel | Edited By Rebecca McCracken
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Even the best car insurance companies won't cover you in every situation. It's up to you to understand which occurrences will be your financial responsibility so that you can be prepared for emergencies. It's essential to read the details of your policy, but here's what you can expect from most providers.

Common types of car insurance coverage

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  • Bodily injury liability coverage: Required in most states and included in most policies, this covers injuries to the other party in an accident you cause.
  • Property damage liability coverage: This helps pay for repairs after the damage you cause to another person's property with your vehicle.
  • Personal injury protection or medical payments coverage: This coverage pays for your medical bills in an accident you cause, along with lost wages. In the event of your death, it can also cover funeral costs.
  • Uninsured/underinsured motorist coverage: If you're in a hit-and-run or are hit by someone without sufficient insurance, this coverage kicks in to pay out above and beyond the other driver's policy limits.
  • Collision coverage: This covers damage to your vehicle if you cause an accident.
  • Comprehensive coverage: This helps pay for repairs or replacement after non-collision events like vandalism or theft.

When you apply for a policy, you'll be able to choose your coverage limits, which are the most your insurance company will pay in the event of an accident, and your deductible, which is your share of the financial responsibility after causing an accident. Depending on the state where you live, these coverage types may be required or optional.

Bodily injury: Usually covered

Paolese/Adobe Woman suffering whiplash after bad cars pile up

Except for New Hampshire and Florida, all states require drivers to have bodily injury liability coverage, and car insurance policies include at least the state minimum bodily injury coverage. But it's a good idea to choose higher limits than what's required by law since medical bills can be costly. Depending on the laws in your state, you could be sued for medical bills above and beyond what your car insurance policy covers.

Other people driving your car: Not always covered

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Other drivers listed on your policy will always be covered. But for everyone else, coverage will depend on if you permitted them to drive your car. For example, if you willingly allow a friend to borrow your car, they will be covered under your insurance policy. However, there are some exceptions, including paid car-sharing and drivers specifically excluded from your policy.

Property damage liability: Usually covered

Nomad_Soul/Adobe Male and female drivers after car accident on road

In all states (except New Hampshire), car insurance policies cover damages to other vehicles or property. Coverage limits vary by state, but in most cases, state minimum required coverages aren't sufficient to pay for a totaled new car. So to protect your finances, choose higher limits than what is required by law.

Ridesharing: Typically not covered

Sundry Photography/Adobe Lyft and UBER stickers on rear window of Toyota Prius

Most car insurance policies exclude ridesharing activities from being covered. From the moment you turn on your Uber or Lyft app to accept rides, your personal auto insurance policy stops covering you. Ridesharing companies provide some coverage, but there is a gap in coverage when drivers are waiting for a ride request. That's why some insurance providers offer rideshare coverage as an add-on.

Medical payments or personal injury protection: Sometimes covered

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In most states, personal injury protection (PIP) and medical payments coverage are optional. These coverages are similar to one another and help pay for your medical bills after an accident, regardless of who is at fault. PIP coverage also pays for lost wages, while MedPay does not.

Items stolen from your car: Not covered

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Only the permanent components of your vehicle are covered in the case of theft. However, personal items like your phone or laptop may be covered under your renters or homeowners policy. You may also have a deductible for that, but you can file a claim with your homeowners or renters provider if the loss is greater than your deductible.

Collision: Covered if you add it to your policy

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Collision coverage helps you pay for repairs after your vehicle is damaged in an accident you cause. If your car is totaled, you'll also receive fair market value for your vehicle. Since this coverage isn't required by law, policies don't automatically include it. While adding collision and comprehensive coverage can double the cost of your car insurance, it's worth it to protect your finances.

Water damage from leaving your windows open: Not covered

michelmond/Adobe Cars submerged in water

If there's hail or flooding in your area, your comprehensive coverage could help pay for the damage. But if you drive or park in a rainstorm with your windows open, and it damages the interior of your car, it won't be covered under your insurance policy.

Comprehensive: Covered if you add it to your policy

Daniel Jędzura/Adobe Large hail ice balls on car hood

Comprehensive coverage is optional, but it's important to add to your policy. It covers theft, vandalism, and other non-collision damages such as hail. Nationwide, folks paid an average of about $168 per year for this coverage in 2018.

Driving across U.S. border: It depends

James Steidl/Adobe cars driving through us mexican border

Even though you buy car insurance based on the laws in your state, your policy will cover you anywhere you drive in the U.S. But if you decide to take a road trip to Mexico, most car insurance companies won't cover you once you've crossed the border. Instead, you’ll usually need to get a supplemental policy for the duration of your trip. However, many insurers will cover you while you're driving in Canada, but check with your provider.

Uninsured and underinsured motorists: Covered if you add it

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In 19 states, uninsured motorist coverage is required by law, and in many states, underinsured motorist coverage is also required. But even if it's not required in your state, it's a good idea to add it to your policy. An estimated one in eight drivers don't carry car insurance. If you are hit by an uninsured driver, you may not be able to receive compensation for your injuries and damages to your vehicle. Uninsured and underinsured motorist coverage also protects you in the event of a hit-and-run.

Regular maintenance: Not covered

Freedomz/Adobe Automobile mechanic repairman checking a car engine

According to the National Association of Insurance Commissioners, car insurance does not cover regular maintenance visits for your vehicle, such as oil changes. And if your car breaks down and it's not due to an accident or other covered events on your policy, you'll be on the hook for the repairs. That's why it's a good idea to budget for your maintenance costs and start saving for an emergency fund for unexpected repairs.

Rental car reimbursement coverage: Covered if you add it

rh2010/Adobe Manager filling car rental documents standing in the showroom with car on the background

In most cases, it's inexpensive to add rental car reimbursement coverage to your car insurance policy, and this coverage can get you back on the road quickly if your vehicle needs to be repaired after an accident. Depending on your policy, there may be a daily rental cost limit and an overall time limit for how long your provider will pay for the rental car, so consult your policy for details. It's a good idea to add this coverage if you need your car to get to work.

Using your car for business purposes: Covered under the right policy

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If you drive your car to and from work, that's considered commuting, and your personal auto policy will cover that. But if you use your car to drive to clients, make deliveries, or in any way use your vehicle in the operation of your business, your personal policy won't cover you during those times. You'll need a commercial car insurance policy.

Roadside assistance: Sometimes covered

rh2010/Adobe Road assistance worker signing some documents with woman near the broken car

Some car insurance companies automatically include roadside assistance in your policy, while others require you to add it. It usually comes at a low cost and can help cover things like lock-outs, flat tires, gas delivery, and more.

Damages that exceed the limits of your liability: Not covered

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If your liability insurance only covers up to $25,000 in property damage liability and you total someone else's brand new Tesla that's worth twice that, your insurance will only pay the other driver $25,000. Depending on if you live in an at-fault state, the other driver may be able to sue you for the difference. That's why it's important to have sufficient liability coverage.

New car replacement coverage: Covered if you add it

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If you have a car that is two years older or less, you may want to add new car replacement coverage to your policy. Cars lose 10% of their value in the first month, and if you don't add new car replacement coverage, you'll only receive the fair market value of your car if it becomes a total loss. Adding the coverage means your insurance company will pay for a new vehicle.

Exotic and performance cars: Probably not covered

Mike Mareen/Adobe Lamborghini supercar at the Lanzarote

Many U.S. auto insurers have exclusions for exotic and performance cars. You'll typically need to find a specialty insurer for these vehicles. Car insurance providers will let you know if your car isn't eligible for coverage during the quoting process.

Bottom line

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If you're looking to lower your car insurance, you might be tempted to only purchase the state minimum coverages. But before you do, make sure you understand the situations in which you'd be financially responsible. There are other ways to save money on car insurance besides dropping comprehensive and collision coverage. Understand your needs and your budget, and compare quotes from multiple companies before choosing the right car insurance policy for you.

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Author Details

Lindsay Frankel Lindsay Frankel is a Denver-based freelance writer who specializes in credit cards, travel, budgeting/saving, and shopping. She has been featured in several finance publications, including LendingTree. When she's not writing, you can find her enjoying the great outdoors, playing music, or cuddling with her rescue pup.