Does your paid car insurance premium mean all driver expenses are covered after an accident? Not necessarily, since every insurance policy has exclusions. It is important to read the fine print to determine the exclusions before you get in an accident.
Often compromises on coverage are made to reduce the cost of your monthly car insurance premium. Go over the car insurance policy carefully to make sure essential items are covered. Minimal car insurance coverage mean driver expenses can go through the roof after an accident. The type of auto insurance coverage you buy defines which expenses will be covered. Basic car insurance policies include no-fault, liability, limited liability and collision.
If you get in a car accident and have liability insurance, medical expenses are not covered for the passengers in your car at the time of the accident. Liability insurance covers damages to the other car and its driver and passengers. It also pays for property damaged by your car during an accident. While the car insurance premium is typically lower for liability insurance, driver expenses could add up quickly. The cost of monthly premiums has to be weighed against the extent of coverage.
If your car it totaled, it is important to discuss the situation with your insurance company. Expenses such as sales tax and registration could be covered by your policy or the other driver's policy. In certain situations, the other party's policy may cover what your insurance does not. Medical coverage could be part of your car insurance policy. A deductible may apply if you seek reimbursement for medical expenses incurred from an accident. A lower car insurance premium might mean medical coverage becomes a driver expense. Review the terms of your auto insurance policy to verify the extent of medical coverage.
Another add-on option is car rental insurance. Unless this option is added to your policy, you might have to pay for a rental car until your vehicle is repaired. In most instances, there are limitations on the daily reimbursement for a car rental. Regardless of who is at fault, collision and comprehensive car insurance reimburse you for damages to your car caused by the accident. Your vehicle is covered up to its fair market value. Comprehensive insurance coverage also pays for vehicle damage from events such as vandalism, flooding and fire.
Other items that could become a driver expenses include attorneys' fees, custom equipment and furnishings added to the car and personal items that were damaged. The cost of personal items could be covered by a homeowners or renters policy. Each policy has different exclusions driving up the driver expense. An affordable car insurance premium could mean insufficient coverage.