I recently talked about some of the differences in policies from state to state. Due to the those differences, it raises the question of what happens when you’re driving through a state and their coverages and minimums are different than your home state. If you unfortunately have a loss or cause damage while driving outside of the location your policy was written, how does the insurance company handle that?
Does my policy extend in other states?
States do have different minimum liability requirements. No fault states tend to have extremely low limits to be legal on the road. This is because you have the right to have your insurance cover your damages or pay them yourself since you’re responsible for every accident you are in.
How will my policy pay out?
If you’re driving through a state and you have lower liability limits than their state minimum, typically your insurance policy will cover the difference between the mimimum you carry to the minimum allowed for that state.
Are there any special scenerios I need to know about?
There are a few instances where coverage will not apply as normal. In a tort state if someone causes you a loss, their insurance will provide you a rental until your vehicle is repaired or replaced. You do not have to carry rental reimbursement for that to happen. It is the liable party making sure you have something to drive because they caused the loss. In a no fault state, your own insurance company supplies the rental if you carry that coverage no matter who is liable. If you have a tort policy and are driving through a no fault state this is important to understand. If a driver causes you a loss, they will not be providing you a rental even though it is their fault because your insurance would default to operate like a no fault policy. Your own insurance would supply the rental, if you carry that coverage. This is why your own policy is not only important for your liability to others but also at times for yourself as well.
Being aware of these difference before they occur helps make the claims process run more smoothly for you. Don’t be afraid to ask your agent in detail all the specifics so you’re sure you have a handle on all your questions. Understanding your insurance policy is the most important part of purchasing it.