Three Things You May Not Be Aware Of About Minimum Auto Insurance Coverage

Many people buy an auto insurance policy without knowing exactly what their policy covers. To make matters worse, there are many aspects to a policy that are, at best, assumptions by car owners. The following are a few things you may not know about auto insurance.

Your policy does not cover all drivers of your car

You may have heard that car insurance follows the car, and for the most part, this is true. However, there is one notable exception that you need to be aware of. The driver of your car cannot have the same residence as you. In other words, they cannot be living in the same home as you. Whether this is a relative in your home or a roommate, unless this person is listed on your auto insurance policy, there is no insurance coverage for them. The reason for this becomes obvious if you look at it from the auto insurance company's viewpoint. If someone living with you is a high-risk driver and would pay high premiums, they could simply save money and use another person's car that they live with.

Your policy does not automatically come with uninsured motorist coverage

While many people understand this, they don't understand how common it is for accidents to happen involving uninsured drivers. Many states mandate a minimum form of auto insurance coverage, and it is because of this that many think they don't need uninsured motorist coverage. But if you have the minimum coverage by state law, and you get into an accident when it's the other driver's fault, there are many situations where the driver will not have insurance. One example is when the insurance has lapsed, but the driver is still on the road. Uninsured motorist coverage is a low-cost addition to a minimum coverage policy.

Your policy will not cover business use

If you are self-employed, your policy covers personal use only. It will cover trips to and from your business, but if you plan to use your vehicle during working hours, you will need additional coverage. If you are working out of your home, this may not be a problem; however, if you plan to use your car or truck for trips to pick up items you will need, such as inventory, then you may need to purchase additional coverage. It is important to remember that your policy will not automatically cover business use. Talk to your agent to get additional information. Never assume that you have coverage when you are self-employed.

Always remember to add anybody in your household to your policy; otherwise, there is no coverage. Likewise, uninsured motorist is not part of the required coverage, but it isn't that expensive, so you should add it to your policy, even if it is only basic coverage per your state's law. And always talk to your insurance agent about the business use of your vehicle.

To learn more about auto insurance policies, contact a car insurance agency in your area.

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