11 Scenarios Your Car Insurance Won’t Cover
Quick Answer
You may be surprised to learn that auto insurance doesn’t cover things like wear and tear, mechanical failures, driving for business or the cost of a rental car. Find out what else car insurance doesn’t cover and how to protect yourself.
Auto insurance can safeguard you against the expense of an auto accident, car theft or other vehicular emergency. But insurance doesn't guard against every mishap that can befall your car.
Things car insurance may not cover include wear and tear, mechanical breakdowns and accidents while driving for business. Here are 11 things car insurance doesn't cover and how to protect yourself.
1. General Wear and Tear
Collision coverage, part of full coverage auto insurance, pays to repair your car if it's damaged in a collision with another vehicle, mailbox or other object. However, collision insurance won't cover normal wear and tear, such as worn-down tires, brake pads or windshield wipers.
How to protect your car: Budgeting for regular maintenance helps you handle inevitable wear and tear and prevent pricey repairs. On average, drivers spend 10.13 cents per mile driven on maintenance and repairs, according to AAA. Start an emergency fund to pay for maintenance, and cut costs by tackling simple tasks yourself, such as changing air filters, wipers and bulbs.
2. Mechanical Failure
When your fuel injector stops working or a fan belt breaks, car insurance won't cover the cost of repairs. (Mechanical failures caused by covered perils, such as a collision destroying your transmission, are exceptions.)
How to protect your car: When your car is new, many repairs are covered by the manufacturer's warranty. As your car gets older and susceptible to breakdowns, revving up your emergency fund can help you handle unexpected repairs. Extended warranties, available from dealerships or third-party vendors, can help pay for repairs once the manufacturer's warranty expires. Other options include car repair insurance or mechanical breakdown insurance. These typically have lots of exclusions, so be clear on exactly what's covered.
3. Rental Car Reimbursement
On average, auto body repairs take two weeks to complete, according to Kayak. That's a long time without a car after an insurance claim. Standard car insurance won't pay for a rental car—and at an average of $38 per day, according to Kayak, that cost can add up.
How to protect your car: An auto repair shop that offers loaner cars isn't always an option. Ensure you have a ride by adding rental car reimbursement coverage to your auto insurance. Rental car reimbursement coverage typically costs anywhere from $2 to $15 per month and requires carrying comprehensive and collision coverage. During repairs for a covered loss, you usually get a set amount of money per day for a rental car, up to a dollar or time limit.
4. Roadside Assistance
Roadside assistance can be a lifesaver when your car breaks down. This service usually provides towing, jump starts, tire changes and more to get you back on the road. Standard auto insurance doesn't pay for roadside assistance.
How to protect your car: You can usually add roadside assistance to your auto insurance for about $15 to $30 annually per vehicle. It's also available from auto clubs. Before purchasing a plan, see if your vehicle's manufacturer provides free roadside assistance.
Tip: Some cellphone plans and credit cards also offer customers roadside assistance, either free or for a fee.
5. Personal Belongings
If your laptop, sporting gear or other valuables are stolen from your car (or your car is stolen with your belongings inside), who pays to replace them? Not your car insurance company.
How to protect your belongings: Homeowners insurance or renters insurance typically covers personal items stolen from (or with) your vehicle. Review your policy to make sure. Coverage for items outside your home may be lower than for belongings in your home. Insurance for items such as jewelry or computers may be limited to less than their value; you can usually buy a floater policy for additional coverage.
6. Your Car's Purchase Price
When your car is stolen or totaled, your insurance company typically pays out its current market value. However, if your car is relatively new, that may be less than the amount you owe on your car loan. On average, new cars depreciate in value by over 20% after one year of ownership, and another 10% each year thereafter.
How to protect your car: Adding gap insurance to your auto policy can protect you by paying out the full amount of your auto loan if your car is totaled. Another option is new car replacement insurance, which replaces your totaled car with one of the same make and model. Cars too old to qualify for new car replacement insurance may be eligible for better-car replacement insurance, which replaces your car with one of the same make and model that's a year or two newer.
7. Aftermarket Customizations
Aftermarket customizations, such as underbody neon lights, oversized wheels or performance enhancements, make driving more fun, but can also make your car more expensive to repair. If your customized car is stolen or damaged in a covered incident, your car insurance typically only pays to repair or replace using standard parts.
How to protect your car: You can add custom parts and equipment coverage as an endorsement to standard car insurance. This coverage pays for repairing or replacing non-factory equipment or modifications but may be limited to a certain dollar amount. If these limits are too low for you, consider modified vehicle insurance or classic car insurance.
8. Driving Outside the U.S.
Planning a trip outside the U.S.? Standard U.S. auto insurance won't cover you when driving in a foreign country. (Canada is generally the exception; check the details of your policy to make sure.)
How to protect your car: Whether you plan to drive your own car or rent one, you'll typically need to buy auto insurance that covers you in the foreign country you're visiting. For example, Mexican law requires third-party liability coverage from a provider licensed to sell car insurance in Mexico. If your current insurer doesn't sell coverage for the country you're visiting, they may be able to recommend companies that do.
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9. Driving for Business
Standard auto insurance covers you when commuting to work, but not when using your car for any other business purpose. Do you drive for a rideshare service such as Lyft or Uber? Rideshare companies typically provide some level of insurance for drivers, but these policies have limitations that can put you at risk.
For employees, using your personal car to chauffeur clients or make deliveries for work can be a gamble. Technically, your employer's workers' compensation should cover medical expenses if you're injured. However, if your boss and your auto insurance provider can't agree who's responsible, you could be stuck with the bill.
How to protect your car: Ask your auto insurance company what type of coverage you need to use your car for business. Business owners may need commercial auto insurance (also called business auto insurance). Many auto insurance carriers, including Progressive, State Farm and USAA, sell rideshare policies or rideshare insurance endorsements to your existing policy. State Farm estimates a rideshare policy adds 15% to 20% to your premiums .
10. Pet Injuries
While driving your pup to the vet, you get into an accident and Fido goes flying into the windshield. Auto insurance treats pets as property and may provide compensation for pets injured or killed in a car accident. Some insurance companies include pet injury coverage in their collision coverage. However, pet injury payouts usually have low caps, such as $500 or $1,000. With veterinary surgery costing up to $7,000, according to Yelp, that may not cover your bills.
How to protect your pet: Review the coverage your auto insurance provides for your pet in an accident. If it's not enough, consider getting pet insurance to help pay vet bills. Your car insurance provider may sell pet insurance; get quotes from several different carriers to find the best deal. You can also start a pet emergency fund to cover unexpected veterinary bills.
11. Someone Driving Your Car Without Permission
Auto insurance typically won't cover someone using your car without permission. Permission can be explicit (such as when your visiting cousin asks to borrow your car, and you say yes) or implicit (such as the implied permission your teen has to drive your car anytime). Your insurance also won't cover drivers who are specifically excluded on your policy.
How to protect yourself: Insurance companies generally request the names of all your household's licensed drivers. Any driver living with you—including roommates—should be listed on your policy if there's a chance they may use your car. Because excluded drivers can't drive your car for any reason—even an emergency—excluding drivers can be risky. Check with your insurance company to see if excluding a driver is the right decision, or if there are other ways to lower your insurance premiums.
The Bottom Line
Standard auto insurance doesn't cover everything, but buying specialized policies or extra coverage can protect you from most risks. Worried about the extra cost? Maintaining good credit can help keep your premiums down, since insurers in most states can check credit-based insurance scores before issuing insurance.
Shopping around could also save you money on car insurance. Try Experian's free car insurance comparison tool to get quotes from multiple providers at once and see which company offers the best rates.
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About the author
Karen Axelton
Karen Axelton specializes in writing about business and entrepreneurship. She has created content for companies including American Express, Bank of America, MetLife, Amazon, Cox Media, Intel, Intuit, Microsoft and Xerox.
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