Hidden Gaps in Your Auto Insurance Policy Could Cost You Thousands

Peace of mind each time you slide behind the wheel is just one of the things that come with purchasing auto insurance, but it was also designed to protect you from financial ruin in the event of an accident. Unfortunately, there are countless examples out there of a claim arising and the policy holder suddenly being told that they don’t have the necessary coverage they thought they would.

 

These hidden gaps can lead to your auto insurance policy leaving you to foot the bill, which could cost you thousands of dollars you assumed your insurance would cover. At Glover Family Independent Insurance, we’re able to leverage our expertise – not only in insurance, but also in the automotive industry, thanks to our numerous automotive dealership sister companies – to help you avoid these costly surprises.

The first thing we can do to help arm you against these hidden gaps is to give you the rundown on some of the most common coverage exclusions. Here are seven exclusions that pop up more often than we’d like to see them:

1. Wear & Tear. While damage from collisions and other events is often covered by auto insurance, that doesn’t mean all vehicle repairs will be covered by your standard policies. Run-of-the-mill wear and tear instances or mechanical breakdowns caused by lack of maintenance typically aren’t covered.
   • • A failed transmission or damaged engine as a result of failing to maintain either part won’t be covered
     • Damage from things like rust, corrosion or ordinary use of tires won’t be covered
   • Glover Pro Tip — Consider extending your warranty through the dealership, or adding a mechanical breakdown insurance policy if that’s not possible.
2. Commercial Use & Rideshare Services. Unfortunately, using your vehicle for any commercial purposes – such as delivering goods, providing rideshare services or any other business-related use cases – is not covered by personal auto insurance. That means if you were to get into an accident while on the clock, your insurance company could deny your claim.
   • Glover Pro Tip — Add a rideshare endorsement to your policy, or purchase your own commercial auto insurance policy to ensure you’re covered while driving on the job.
3. Custom Parts & Equipment. Tragically for any custom-build enthusiasts out there, equipping your vehicle with things like lift kits, custom wheels and even aftermarket sound systems does not extend your coverage to those parts. While your factory-installed parts will still be covered, you’ll be on the hooking for repairing or replacing  anything that you’ve modified yourself.
   • Glover Pro Tip — If you work with your agent you could potentially add endorsements to cover many, if not all of your aftermarket modifications and accessories.
4. Owed Lease & Loan Payments. If you still own money on your vehicle, whether it be as a result of a loan or a lease agreement, it’s important to keep in mind that your insurance policy won’t typically pay that off in the event of getting totaled after an accident. Most standard insurance policies pay out the actual cash value (ACV) or your vehicle, which could leave you on the hook for thousands of dollars if your vehicle has depreciated significantly.
   • Glover Pro Tip — You can add something called gap insurance to your policy, and this will cover the difference between your vehicle’s ACV and what you still owe on your loan or lease.
5. Excluded Drivers. When you sign the agreement for your automotive insurance policy, you are typically required to specify who is covered while driving your vehicle. That means if you let a friend or family member borrow your vehicle, but they’re not listed on your coverage, your insurer will likely deny any claims that come about while they’re operating the vehicle.
   • Glover Pro Tip — Review your policy to recognize who is and isn’t covered. If necessary, you can add frequent drivers to your policy to better avoid these denied claims.
6. Natural Disasters & Acts of God. Regrettably, most policies do not cover damage from events like floods, tornadoes or even hail. This is particularly relevant and lamentable in our region of states like Oklahoma, Texas and Arkansas, where severe weather events are common.
   • Glover Pro Tip — While standard policies don’t cover these things, you can opt for more comprehensive coverage which will often include these things.
7. Rental Cars. Finally, a lot of insurance policies do not cover the costs of rental cars required in the aftermath of an accident. In other words, if your vehicle has to spend some time at the shop following a collision, to the extent that you have to rent a car to get around in the meantime, you might be on the hook for those rental costs yourself.
   • Glover Pro Tip — You can add rental reimbursement coverage to your policy for a little extra peace of mind.

 

Now that you know about these hidden gaps, carefully consider which ones worry you the most and consider addressing them according to our pro tips. Our expert staff members are ready and willing to help you get the most out of your policies, and make sure you’re covered for what you truly want and need. Just give us a call to get started today!