9 Unexpected Things Your Car Insurance Won’t Cover

Quick Answer

You may be surprised to learn that auto insurance doesn’t cover things like wear and tear, mechanical failures, driving for business or the cost of a rental car. Find out what else car insurance doesn’t cover and how to protect yourself.

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Auto insurance can protect you from shouldering the costs of an auto accident, car theft or other automotive emergency. But insurance doesn't guard against every mishap that can befall your car.

Things your auto insurance may not cover include wear and tear, mechanical failures and driving your car for business. Here's a closer look at what car insurance doesn't cover and how to protect yourself.

1. General Wear and Tear

Collision coverage pays to repair your car from damage due to colliding with another vehicle, tree, fence or other object. It won't pay for normal wear and tear on your car, however, such as worn-down tires, windshield wipers or brake pads.

2. Mechanical Failure

If your timing belt breaks, your car needs a new transmission or another mechanical failure occurs, your insurance will not cover the repair. The exception is if the failure was caused by a covered peril—for example, a collision that caused a transmission failure.

3. Rental Car Reimbursement

While your car is in the shop for repairs, you might need to rent a car to get to work or school. Auto insurance typically does not include reimbursement for rental cars.

However, you can add a policy rider to reimburse you for a rental car. This rider only covers situations when your vehicle is unusable due to a covered event; if you need a car while yours is having a tune-up, see if the auto repair shop offers loaner vehicles.

4. Roadside Assistance

Standard auto insurance doesn't pay for roadside assistance or towing if your car breaks down while you're driving. Most insurers sell this as add-on coverage, however. You may also be able to get roadside assistance coverage through automotive clubs, your car's manufacturer, your cellphone carrier or your credit card company.

5. Personal Belongings

When your laptop, handbag or other personal possessions are stolen from your car (or the car is stolen with the items inside), who pays to replace your belongings? Not your car insurance company. Your homeowners insurance or renters insurance usually covers this type of loss; check your policy to make sure.

6. Your Car's Purchase Price

When your car is totaled or stolen, your insurance company will pay out its current market value. But if your car is relatively new, the payout may be less than the amount you owe on your auto loan. On average, cars depreciate by more than 20% in value after the first year of ownership, and an additional 10% each year after that. Purchasing gap insurance from your insurance company can bridge this difference; it pays out the full amount you owe on your auto loan.

7. Aftermarket Customizations

Do you drive a souped-up custom car? Aftermarket customizations, such as tinted windows, fancy paint jobs, oversized wheels or performance enhancements, can make your vehicle more fun to drive. But if your car is stolen or damaged in a covered incident, auto insurance generally only pays for repairing or replacing with standard parts. To avoid having to pay out of pocket, consider buying customized equipment insurance to cover these features.

8. Driving in Mexico

Planning a trip south of the border? You'll need to purchase special insurance first. Standard U.S. auto insurance doesn't cover you in Mexico. Mexican law requires third-party liability coverage from a provider that's licensed to sell auto policies in Mexico. If your current insurer isn't licensed to sell this coverage, they may be able to recommend companies that are.

9. Driving for Business

Standard car insurance doesn't cover you when you're driving your car for business purposes. Driving to work doesn't count, but if you use your car to make deliveries, chauffeur clients or perform any other commercial activity, you'll need business auto insurance.

And, if you're injured while driving your car for business purposes, getting your medical bills paid can be a headache. Workers' compensation is supposed to cover them, but driving your own car can cause a dispute between your employer's insurance company and your auto insurance company that leaves your bills unpaid.

The same holds true when you drive for rideshare services such as Uber or Lyft. Although rideshare companies typically provide limited insurance for their drivers, these policies have gaps in coverage that can put you at risk. Talk to your car insurance company to see what type of coverage you need to drive for a rideshare service. Many insurers sell separate rideshare policies or allow you to add a rideshare endorsement to your current policy.

Protect Yourself With the Right Car Insurance

Standard auto insurance doesn't cover every situation. By purchasing riders or specialized policies, however, you can protect yourself from most driving-related risks. Most of these add-ons are very affordable and shouldn't raise your premiums by much. If you're worried about cost, ask your insurer for ways to lower your insurance costs, such as bundling insurance or increasing your deductible.

Insurance companies in many states can check your credit-based insurance score before issuing insurance. Although you can't view your credit-based insurance score online, it incorporates many of the same factors as your regular credit score, so maintaining good credit can help minimize your car insurance rates. Check your credit score and credit report to see where you stand. Protecting your credit score can make it easier to get the auto insurance protection you need.

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