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It seems like a straightforward question, yet the answer can be a bit more complicated. “When you buy car insurance, WHAT ARE you insuring?” Are you insuring yourself as a driver? Are you insuring a vehicle? Perhaps you are insuring against financial damages from injuring another person or the car or other property. Let’s take a closer look at some of the aspects of automobile insurance.
All states have some form of financial liability laws that generally requires minimum levels of liability insurance. This liability coverage takes care of your legal responsibility to others for bodily injury or property damage. This follows the driver should they be driving a vehicle owned by someone else. In this instance, their own auto liability insurance will usually cover them in an accident.
That being said, in other circumstances, insurance usually follows the car. For example, when you have comprehensive and collision coverage, you are insuring a specific vehicle. This is why the mileage you travel, where you park your car and year, make and model will have such an impact on your insurance rates. Keep in mind, however, that there will be drivers that need to be listed as insureds on an automobile policy, such as members of your family that are of legal age. So while the insurance follows the car, the insureds must be named to be covered while driving the car.
It can get a bit more convoluted when you allow a friend or neighbor to drive your insured car. This can best be deciphered by reading your policy to see if your insurance will cover others who drive your car with permission. Often a policy will defer to the driver’s, not the owner’s coverage for protection.
When renting a car, whatever coverage you carry on your personal vehicle will generally transfer to the rental car. If you have liability coverage, that will transfer. If you have comprehensive and collision, that will transfer.
The ins and outs of auto insurance are just one reason having your own independent insurance agent makes so much sense. We are here to review your policy, answer your questions, and make sure you have the appropriate coverage for your particular situation. We invite you to contact us for your complimentary review and potential savings.