Have you ever wondered what your car insurance policy does not cover? For example, if you are injured in a car accident, does your liability insurance pay your medical bills or is that up to your health insurance company? Are there certain types of damage your car insurance does not pay for? There so many different scenarios for filing a claim you really need to know what may or may not be covered by your car insurance policy.

What type of car insurance do you have?

First, you must understand what type of car insurance you have, because this will be instrumental in determining whether an event is covered by your car insurance. If you take out only the basic liability required by the state, you will be covered for far fewer incidents than if you have what is known as “full coverage” insurance that includes comprehensive and collision policies.

Liability insurance is the minimum amount required by your state and is usually shown on your declarations page, or “dec sheet,” as three numerals with slash marks between them, such as 15/30/10. This translates to $15,000 of personal injury liability per person or $30,000 per accident, and $10,000 of property damage liability. Any amounts required to pay damages in an accident over these limits will come from your pocket.

Liability pays only for the damages you cause in an accident, and it only pays for the other person’s property damage. If you are the victim in a car accident, the other person’s liability policy must pay your damages, including your medical bills. However, in some states, people are required to carry personal injury protection, or PIP coverage, to pay for their own medical bills. Health insurance does not usually pay for these expenses unless there is no insurance coverage to pay them. If another person causes an accident and does not have insurance, you may also need uninsured motorist coverage. This is your own policy that is part of your insurance coverage, and pays your expenses if there is no coverage available when another person causes an accident.

Damage to Your Own Vehicle

Physical damage to your car from an accident you caused, theft, fire, tornado, flood, and other non-accident claims are not covered by your liability insurance. To cover these events, you must have comprehensive and collision policies in place. Collision pays for damage to your vehicle if you cause an accident, and comprehensive pays for all non-accident-related damages.

Excluded Events

There are also certain events that are simply not covered by your insurance policies, even if you have full coverage. For example, if you are using your car in a deliberately illegal act such as robbing a store, and you crash your car, it is likely your insurance company will not pay the damages. It is also likely that your insurance company will pass on payment of damages if you are driving under the influence of alcohol or drugs. However, some states demand that insurance companies pay other people’s damages in these situations, so check with your insurance company to discover the limits of your policy’s protection.

The Amount of a Claim

Another area that frequently surprises people is the amount an insurance company will pay on a claim. Of course, your deductible is subtracted right off the top, but even so, many people are shocked at how little they recover if their car is totaled. This is because the “total” amount of a vehicle is based on book value, not on what you paid for the car. It is likely that the book value will not come close to paying off the car in the first few years of ownership. Therefore, it is wise to have supplemental coverage such as “gap” coverage to pay the difference between what you owe and what the car will be worth if it is totaled.

How Big is Insurance Fraud?

Fraud is a huge problem for insurance companies. It is estimated that one out of every four claims filed with insurance companies is fraudulent in some way. It is very likely that if the insurance company finds out that you have been dishonest in some aspect of filing your claim that your claim will be denied completely and you may even lose your insurance coverage. If your policy is cancelled for fraud, you may find it difficult to find another company to insure you. It is always better to be honest with your insurance company, even if it means you will lose a certain amount of your claim or not be covered at all.

There are also a few individual “quirks” that certain insurance companies have about events that are not covered. Be sure to talk to your agent carefully about your policy and what you need for coverage.