Common Misconceptions About Car Insurance

Know what you have before you need it: a quick review of your car insurance policy will remind you what's covered, and what's not.

It's easy to make assumptions about auto insurance, and it's even easier to forget certain details about your own unique coverage.

A quick review of your auto insurance policy can easily shed some light on things. Start with the Policy Declarations, which contains the details of what's covered by your policy.

Below are some of the most common misconceptions about auto insurance and helpful guidance on those issues.

I Thought I Had "Full Coverage."
Many people believe that an auto insurance policy automatically includes things like Comprehensive Coverage, a low deductible, coverage for possessions stored or transported in your car, protection against theft or damage of special custom add-ons, or even automatic rental car reimbursement after an accident.

In truth, these are options that you typically must specifically choose, and purchase, for your auto insurance policy. (In some cases, state laws dictate what kind of coverage options an insurance company is allowed, or not allowed, to offer its customers. Therefore, the laws in your state could affect the kind of insurance coverage you’ll be able to purchase.)

I Thought I Had Rental Car Reimbursement.

If you've been in an accident and your car is not drivable, you'll most likely need a rental car. It's easy to assume that an auto policy automatically covers the cost of renting a temporary replacement car.

However, this, too, is an option. Rental car reimbursement coverage must be specifically requested and purchased when you buy your policy. Talk with your agent or review your policy for more details to see if you are covered.

I Wasn't Driving My Car When It Was Damaged. Why am I Being Held Responsible?

If you lend your car to a friend who happens to then get into an accident, it might seem easy to assume that your friend will be responsible for the damage. In truth, however, auto insurance is designed to protect you, your assets, and your car. Auto insurance is designed to help protect you in situations that involve your vehicle. Which is one of the reasons that auto coverage follows the car.

That means that if the covered car is damaged or involved in an accident, no matter who's driving, the policy attached to the car - not the person driving it - will be expected to cover the loss. That's as long as the person driving had verbal or written permission to do so.

 Source : http://www.allstate.com/auto-insurance/common-auto-insurance-misconceptions.aspx#fullcov