Key Points to Understand About Auto Insurance Coverage

Monday, 11 March 2024, 12:30

Auto insurance policies may not cover specific losses, such as custom parts, personal property, commercial use, and full car loan balance. It's crucial for drivers to be aware of these exclusions to make informed decisions and protect themselves financially. Additional coverages like add-on policies or riders can bridge the gaps left by standard auto insurance.
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Key Points to Understand About Auto Insurance Coverage

Custom parts

Drivers who add aftermarket parts to their vehicle may find limited or no coverage from standard auto insurance policies. Insurers typically do not pay for fancy stereo equipment, custom paint jobs, added chrome or lights, custom tires or wheels, or custom spoilers unless specific coverage is purchased.

Personal property in the car

Auto insurance usually does not cover personal belongings kept inside the vehicle. If the car is stolen with personal items inside or if these items are damaged in an accident, the insurer does not provide any compensation.

Commercial use

Personal auto insurance policies do not cover vehicles used for business purposes. It's important for drivers engaging in business use, like food delivery or ride-hailing, to obtain insurance that includes coverage for these activities.

Full balance due on a car loan

If a vehicle is stolen or damaged beyond repair, auto insurance pays only the fair market value. Drivers with car loans exceeding the car's value should consider gap insurance to cover the remaining loan balance.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.

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