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Car insurance can come to your rescue during one of your worst days. It can be the difference between paying for expensive damages and tragic injuries. However, your car insurance policy might cover less than you think in 2024.

Your car insurance policy might not cover everything you thought it did

A set of drivers inspect damage before exchanging car insurance information.
A pair of drivers inspect collision damage | monkeybusinessimages via iStock

While a comprehensive car insurance policy will cover unfortunate actions like theft, fire, crashes, and vandalism, it doesn’t cover everything. There are certain things, depending on your insurance coverage, that your provider won’t cover.

  • Natural disasters
  • A balance on your vehicle’s lien
  • Modifications and enhancements
  • Daily driver classic cars

Granted, your comprehensive car insurance policy will likely cover natural disasters like fires and floods. However, if you opt for a more affordable collision policy, you likely won’t be covered in a natural disaster. As a result, you could be left holding the bill for expensive car repairs or a virtually worthless vehicle. 

What’s more, if you don’t opt for gap insurance, you could be responsible for any disparity in your vehicle’s value against the lien value. For instance, if you owe $20,000 on your vehicle, but your provider values it at $14,000, you could be on the hook for the remaining $6,000 in the event of a total loss. 

Many car enthusiasts add modifications like exhaust systems, forced induction kits, body modifications, or cold air intakes (CAI) to their vehicles. Unfortunately, your policy likely won’t cover out-of-pocket mods. That is, unless you opt for an agreed value policy that itemizes your modifications. 

However, you can tailor a car insurance policy to cover most situations with few exceptions. Still, you might be out of luck if you want to daily drive your classic car. While you can insure a classic like a 1965 Ford Mustang or a 1970 Jaguar E-Type for daily use, your general policy will likely reflect a value that doesn’t consider the vehicle’s collectibility. 

When I daily drove my 1967 Chevrolet Camaro, a vehicle that routinely sells for between $20,000 and $50,000, my insurance provider claimed the value of my vehicle in a total loss situation was around $6,000. Ouch.

A classic car insurance policy through a provider like Hagerty will offer a much more accurate value on your rolling time capsule. However, you won’t be able to daily drive due to the policy’s restrictions.

Source: The Zebra