You purchase car insurance coverage for one major reason - to be defended or indemnified for losses you sustain, or losses you inflict upon other persons, in the event of a car accident. The contract of insurance is an agreement that you should take very seriously. As a matter of fact, you should read the fine print in your policy every now and then to review what you are and are not covered for. Sure, we see those advertisements on television where insurance companies depict themselves as almost being a friend or guardian angel. Those commercials are fine, but if something goes wrong and your insurance carrier refuses to indemnify you on a loss, it's the fine print in your car insurance coverage that will come into play.
When consumers shop for insurance, sometimes it seems that their primary objectives are to obtain the cheapest possible insurance quotes. It's important to look beyond those cheap quotes. A low quote may be based upon a ruinously high deductible, or it may be based upon the lowest legally permissible limits of coverage. The quote may be based on strict conditions about the use of the vehicle. One should recognize these aspects of a policy before something goes wrong.
One circumstance in which a carrier will not pay for a loss is if it falls outside the scope of coverage. As an example, imagine that a person purchases insurance for personal use. They live in a single household and list themselves as the only driver of the vehicle. If they loan the car to a friend and the friend has an accident, the carrier could deny coverage on the policyholder's car insurance claim. Although many carriers will typically cover such losses, it is within their discretion to deny them if they so choose.
Let's picture another scenario where our friend now uses the car to make deliveries for a pizzeria. If he was involved in an accident, he could lose in a twofold manner. If the other car's driver sued him for negligence, he could find himself out in the cold and without coverage. This is because the insurance policy was not for commercial use of the vehicle. It only covered personal use. And if our friend needed medical care for his own injuries, he would be out of luck again because his first-party no-fault benefits would be denied for the reason that the accident arose within the scope of employment.
This is why it's important to consider things beyond a cheap car insurance quote when purchasing insurance. Think about who will use a vehicle and in what manner. Otherwise, it may come as an unpleasant surprise if the carrier will not cover a loss.