If you’re not in the insurance business, car insurance can seem rather grey as to what is and what is not covered on a policy. Here are 3 of the top questions that auto insurance professionals are asked.
Can Someone Else Drive My Car?
Auto insurance policies follow the car and not the driver in New York State. What this means is that “Yes” someone else can legally drive your car, but it is important to understand that they are borrowing your insurance as well.
Say you let a friend borrow your car and they get into an accident at fault causing injury and property damage to others along with damage to your vehicle. It is your insurance that will pay out from your liability coverage for injuries to others and your property damage coverage will pay out for the damage to other vehicles and/or inanimate objects. Finally, it’s your collision coverage that will pay to have your own vehicle repaired.
Where things can get dicey for you is if your liability and property damage coverage is inadequate to cover the injuries and physical damage caused in the crash. Your friend’s policy can act as second in line to cover the excess once your limits are exhausted but if that is still not enough, you could be held liable for the difference. If you do not carry collision coverage, then the damage to your own vehicle would not be covered by insurance and solely your responsibility to repair.
How Much Liability Coverage Do I Need?
As the old saying goes, “the more you have to lose, the more you need to protect”. Liability protects you against causing injury to someone else and in the case of a car accident, injuries can lead to very large monetary lawsuits.
If you are deemed at-fault in a car crash which results in a significant injury or even death to another or others, being sued for a million dollars or more is not out of the norm. Now consider being in that predicament staring down a $1 million lawsuit and only carrying $25,000, $100,000 or even $250,000 in bodily injury liability protection. What will you do?
The best way to prevent getting caught in a financial nightmare like this is to carry adequate liability coverage. For people with assets to lose its advisable to have a minimum limit of 250K/500K on the auto policy along with a minimum $1 million umbrella covering over both auto and home.
Do I Need To Get Rental Car Insurance?
Since rental car insurance can be quite expensive, you most likely should decline the offer for rental car insurance if you have your own auto policy or are included as a driver on a policy that includes adequate liability, collision and comprehensive coverage because your personal policy will follow you to rented vehicles.
In New York State, your own auto policy’s coverage will cover you for the rental car.
But, if you only carry liability protection you will want to accept physical damage coverage for the rental vehicle. If you don’t and have an accident causing physical damage to your vehicle or someone else’s, the repair bill will be your responsibility solely.
Its also important to note that most NY insurance companies will not extend your own auto policy coverage beyond the US or Canada. If you plan to rent a car to drive outside of the US, accepting the rental car company policy is the smart move.
If you have any questions regarding auto, home and business insurance options, please contact us, we’re always glad to help. The NY Insurance Hub serves Albany, Schenectady, Troy, Latham, Cohoes, Watervliet, Clifton Park, Saratoga Springs, surrounding Capital Region areas and all of New York State from NYC to Buffalo.