Personal Insurance FAQs
What does "full coverage" mean?
Full coverage refers to a collection of coverages that include liability insurance as well as additional forms of coverage, such as collision insurance, comprehensive insurance, MedPay, and personal injury protection.
In most states, drivers must carry a liability insurance policy that meets the state’s minimum coverage requirements. There are no laws that require drivers to carry full coverage, but lenders often require it as part of a loan agreement. The same may be true for drivers that lease a vehicle.
Full coverage auto insurance includes a combination of liability, collision, and comprehensive policies, which provide enough coverage to protect you in most scenarios that could occur with your vehicle.
If you intend to or already have purchased full coverage, it’s important to read your insurance contract. It will include details about what isn’t covered under a full-coverage policy. You can also speak to your insurance agent to discuss any coverage exclusions.
Am I covered if I drive someone else's vehicle?
Generally speaking, auto insurance follows the car instead of the driver. Follows the car, meaning: if you lend your friend your car and your friend gets into a collision, your insurance would cover it, and if your friend lends you their car and you get into a collision, your friends insurance would cover it.
However...there can be exceptions to this rule depending on the situation and the type of insurance coverage.
That's why, whenever you lend your car out, it is essential to:
- Review your policy's coverage, including its limits and wording around driver permissions.
- Make sure the person you are lending your car to is covered and review his/her policy, as well.
- Only lend your car to people you know well and whom you know are safe drivers.
- Don't lend your car out for extended periods of time or for long, inter-state or international trips, as this will increase the odds of a collision and could change the coverage situation if the state's or country's rules are different from those of your own state/country.
If I rent a car, am I covered?
If you have current car insurance that includes collision, comprehensive, and liability coverage, your auto insurance policy likely will cover you in the event your rental car is damaged in an accident. However, it’s important to know your insurance policy limits because your car insurance company won’t pay out more than your coverage limits. Also, your car insurance might have additional limitations on how much coverage it will provide for long-term rentals.
Before renting a car, it’s important to speak with your insurance agent or company to find out exactly what your car insurance policy will cover on a rental car.
Types of Insurance Needed for Rental Cars
Every auto insurance policy contains different types of coverage that could provide protection if you are in an accident while driving a rental car. These include:
- Liability: This coverage pays for others’ property damage or bodily injury in an accident where you are at fault.
- Collision: This coverage pays to repair or replace the vehicle if it is damaged in a car wreck, rolls over, or collides with another object such as a tree.
- Comprehensive: This coverage pays to repair or replace the vehicle when it is stolen or damaged by something other than a collision, such as hail damage or hitting a deer.
- Personal injury protection (PIP)/Medical payments (MedPay): This coverage pays the medical expenses for you and your passengers, regardless of who is at fault in the accident.
What should I do if I have damage to my vehicle's glass?
Glass damage is usually covered by your comprehensive insurance unless the damage was caused during an accident, at which point your collision coverage or the other driver's liability coverage may apply.
What does Umbrella insurance cover?
Umbrella insurance provides “excess liability insurance” (simply meaning additional coverage) beyond the liability insurance already in your auto, homeowners and/or watercraft insurance policies. It’s for expensive situations where medical bills and/or repairs exceed your “base” auto, home or boat policies. You can think of it as asset protection because it can prevent you from losing your assets in order to pay for a lawsuit against you.
Why is Umbrella insurance important?
When thinking about assets, there are obvious items that come to mind: your car, house, investment accounts, and checking and savings accounts. But more broadly, even your estimated stream of future income can be viewed as an asset. In fact, it may even prove to be the most valuable asset of all.
In the event that you become the target of a lawsuit for a substantial sum of money, but don't have enough insurance to cover the damages that may arise, the expenses would have to come out of pocket. This could create significant financial hardship. An umbrella policy can forestall the prospect of financial ruin due to an unintentional misstep or an unforeseeable accident.
How much insurance coverage should I have on my home?
Home insurance covers you in many ways, but the most important thing to do is to get enough dwelling coverage to cover the cost to rebuild your home in full and enough personal property coverage to cover the cost of your belongings.
What is the difference between market value and replacement cost?
Market value is the estimated price at which your property would be sold on the open market between a willing buyer and a willing seller under all conditions for a fair sale. Replacement cost is the estimated cost to construct, at current prices, a building with equal utility to the building being appraised.