What is Not Covered by Car Insurance?
It’s one of those terms that makes my neck twitch.
But it’s a term we’ve heard a lot in our 97 years in business here at Berry Insurance. Many people call us asking us to quote them “full coverage” auto insurance. It sounds amazing. But the fact of the matter is, no policy has “full coverage”.
“Full coverage” is a term most commonly heard from attorneys, banks or lenders/finance companies. It is used to quickly indicate the combination of coverages needed on your policy to satisfy your loan requirements. Typically these coverages include liability, comprehensive and collision.
But even if you have what they refer to as “full coverage”, you are never going to be fully protected. There are always going to be instances where you don’t have coverage.
Today we’re going to explain what is not covered by car insurance in Massachusetts. We’ll also tell you ways to get coverage and explain the ones that you simply just can’t insure against.
Liability for Accidents Outside of Massachusetts
Problem: If you only purchase “minimum state limits” then you will not have coverage for any accidents you cause while driving outside of Massachusetts.
Solution: Purchase “Optional Bodily Injury” coverage on your policy. This will broaden your existing bodily injury limit to include accidents in all states.
Damage to Your Vehicle
Problem: If you only purchase “minimum state limits” then you will not have coverage for any damages to your vehicle. The Massachusetts compulsory (state-mandated) auto insurance coverages only provide property damage to someone else’s property – not yours.
Solution: Purchase “Collision” and/or “Comprehensive” coverages to provide coverage for damages to your vehicle.
Problem: Your car is in the shop for general maintenance repairs and you need to rent a car for a few days.
If you’ve purchased “Substitute Transportation” coverage on your policy, you will be covered for the cost of a rental car only if you need it due to a covered claim.
Clients often ask us if they can use this coverage to rent a car for other purposes. Unfortunately, substitute transportation does not extend when your vehicle goes into the shop for new brakes, muffler, or any other general service work.
Solution: You can’t add this coverage to your policy, but you might be able to obtain a temporary rental from the autobody shop or dealership completing the repairs. It may not work, but it doesn’t hurt to ask!
Rental Car Loss of Use
Problem: You’ve rented a car while on vacation, and then were in a car accident. (This actually happened to me a few years ago!) You get a new rental, but the rental car company is now down a vehicle while repairs are being completed. The “loss of use” for this vehicle is an expense to the rental car company. One that they are going to look to you to pay for.
Solution: You can’t buy this coverage on your Massachusetts auto policy, but you may be able to buy it through the rental car company. It also could be available at no cost from the credit card company you use to get the rental. Be sure to check with both to get the best bang for your buck!
Rental Car Outside the US and Canada
Problem: You’re traveling internationally for work or for pleasure – maybe a nice trip to Europe with your family. You need a rental car.
Your Massachusetts car insurance policy provides liability for accidents in the United States and Canada, but not anywhere else.
Solution: You cannot add international liability to your auto policy, but you likely can purchase it when you sign your rental contract. Be sure to review the contract wording carefully so you can make sure your trip is properly covered.
Renting a U-Haul
Problem: You’re moving and need to rent a U-Haul. Or you’ve just purchased a riding lawn mower and need a one-day U-Haul rental to get it home. Unfortunately, if you are in an accident, your Massachusetts auto policy does not provide collision or comprehensive coverage for U-Hauls.
Solution: Buy the insurance through the rental company (if they offer it). It might be expensive, but it’s worth it!
Personal Property Inside Your Car
Problem: Your minivan is like your second home. Even a trip to Target means your van is loaded with iPads, toys, books and more for your kiddos. Maybe your spouse even brings their laptop to try and get work done while you drive. And if you’re like me, you’ve also got changes of clothes and sporting equipment in the back.
If you get in an accident that causes damage or loss to your personal belongings, you will not have coverage for them on your Massachusetts auto insurance policy.
Solution: Have personal property coverage on your renters, condo or homeowners insurance policy. You would be able to file a claim under this policy for any items inside your car at the time of the accident.
Keep in mind though that your personal property coverage will have a deductible. If the value of your belongings you need to claim is less than that deductible, you would not have any coverage.
Problem: Your car broke and you’re stranded on the side of the road. You call a tow truck company and they tow your vehicle to the auto body shop and give you a lift there.
Solution: If you purchase “Towing” coverage on your auto policy, your policy will pay for “towing and labor costs incurred each time your auto is disabled.” It will also “pay only for labor done at the scene to the extent that the labor was needed to get your auto going.”
Note: Towing coverage is a reimbursement coverage. This means you have to pay for the towing service out of pocket first, and then submit the claim with your receipts to the insurance company for reimbursement later.
An alternative solution would be for AAA members. AAA includes roadside assistance, with some limitations. If you are a AAA member, you can call AAA to arrange for an approved towing company.
Wear and Tear
Problem: You bring your car in for an oil change and leave 8 hours later with over $1,500 in repairs.
Solution: Sorry, we don’t have a perfect solution here. Wear and tear and general maintenance are not covered under your auto insurance policy, as they are considered expected costs of owning a vehicle.
If you have a loan or lease, however, and complete the repairs at the dealership you purchased your car from, some of these maintenance repairs could be covered. Be sure to ask the dealership what incentives they offer for completing service work with them.
Problem: You just got a new job working for an interior design company. As part of your job, you drive to job sites giving estimates and dropping off supplies.
Solution: In some instances (depending upon the work being done), you can endorse your policy to include a “business use” rating class. This will protect you if you get in an accident while using the car for business.
There are situations where you might not be eligible for the “business use” rating. In those situations, it may make sense to discuss a Business Auto Policy with your insurance agent.
Note: the act of driving to and from work is not considered using your vehicle for business.
Problem: You’ve decided to work for Lyft to earn some part-time income for the holidays. Your auto policy does not cover ride sharing.
Some insurance companies have an endorsement that extends liability coverage while you are signed in but have not accepted a fare. However, once you accept a fare, even before you pick up that fare, coverage ceases.
Loan Gap Coverage
Problem: You have a $15,000 balance on your car loan. You get in a car accident and the insurance company declares your vehicle to be a “total loss”. This means that they feel it would cost more to repair it than it is worth. They determine the value of your car to be $10,000 and cut you a check. But you still owe your lender an additional $5,000!
Solution: Purchase “GAP coverage” on your policy. For around $25-$50 a year, you can add this coverage and be protected for that difference. Check out our recent article to learn more about GAP insurance and why you need it.
You Drive Someone Else’s Car
Problem: You’re out with some friends. One of them gets tipsy so you stay sober to drive them home. You get in a car accident with your friend’s vehicle.
Your friend has car insurance – but is it enough?
A Massachusetts auto policy is designed to follow the car, not the driver. So when you drive your car, your auto policy would respond to a claim. But when you drive your friend’s car, its their auto policy that would pay. What if they don’t have enough coverage?
Solution: Unfortunately, there isn’t an easy answer here. It’s unlikely you’re going to ask your friend to review their policy limits before you drive their car. And under these circumstances, you certainly wouldn’t. But, it is something you should keep in mind before you get behind the wheel of someone else’s car.
So What is Covered?
After reading all of this, you’re probably feeling frustrated – like you just bought an auto insurance policy that doesn’t cover anything!
We get it.
While there are many situations in which you won’t automatically have coverage. We hope we’ve given you some guidance on how you can protect yourself for them, either with additional coverage or through another source.
At Berry Insurance, we never want our clients to pay more for insurance than they have to. But we always want our clients to have the protection they deserve. Be sure to check out our recent article to learn more about the costs of auto insurance, and how you can save while still being protected.