Driving in Mexico
If you’re planning a road trip to Mexico, special insurance will be needed as standard U.S. auto insurance policies don’t provide coverage in Mexico. Mexican law requires third-party liability coverage from a provider that is licensed to sell in the country.
However, standard auto policies will continue to provide coverage for trips in Canada due to an agreement between the U.S. and our neighbors to the North.
Ride-share, deliveries & other gigs
Personal auto insurance doesn’t cover commercial use, including ride-shares and delivery services, so if an Uber driver is in an accident their personal auto insurer could refuse to cover the damages
However, as the gig work becomes more popular, insurance companies have responded by selling supplemental coverage for ride-share drivers.
(Credit: Diego M. Radzinschi/ALM)
Auto insurance will not cover items such as wallets, laptops or purses that are stolen from a vehicle. However, a home or renters policy might provide coverage for lost items.
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Custom body kits, aftermarket rims and candy-coated paint jobs can take a standard ride and turn it into a piece of art. Unfortunately, the typical auto policy is something of a philistine when it comes to the automotive craft as standard coverage will only pay for repairing or replacing standard parts.
(Credit: Chris Hunkeler/Wikimedia)
The gap between the vehicle’s value and the loan amount
Auto insurance covers the value of the vehicle, set at the current fair market price, not the amount owed on the car. However, gap insurance is available to make up the difference.
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A standard auto policy typically doesn’t offer roadside assistance or a tow if your car breaks down while driving. This type of coverage can be added to a policy, and it is also available through car clubs, automakers and credit card companies.
Chipped windshields, vandalism and auto accidents are among the most common incidents that result in auto insurance claims that policyholders expect to be covered. However, when it comes to auto insurance claims, expectations often outpace reality as drivers often assume more coverage than what is actually provided.
In fact, among policyholders that filed a claim in the past five years, 40% had an event where the policy did not respond as they had expected, according to a 2022 survey by VIU by HUB. The survey also found that 80% of policyholders said there are aspects of their home and auto policies that they want to learn more about or understand better.
“Consumers are right to be concerned about the possibility of coverage gaps, as the economy is changing quickly and many people are unknowingly underinsured,” Bryan Davis, executive vice president, head of VIU, said in a release. “Education and insight can help alleviate those concerns while the advice of an expert can ensure ideal coverage and protection.”
The above slideshow highlights seven events that drivers incorrectly believe are covered by standard auto insurance policies, according to Money Geek and Experian.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.