A new AAA survey indicated that 66% of the adult US population plan to travel at least once this year. In addition, the average adult is expected to make 3.5 trips this summer. You can bet that a large percentage of those travelers will be hitting the roadways with gas prices expected to be lower than in the summer of 2012. If you’re planning a road trip, it’s important to understand your auto insurance coverage across state lines.
Does your auto insurance policy cover out-of-state travel?
Generally, most auto insurance policies cover travel outside of your home state. However, states vary by minimum liability coverage requirements. This could mean that the minimum liability coverage in your home state is less than in another state that you are traveling through on your trip. However, a broadening clause in your policy can go into effect, which increases the coverage limits to that state’s minimum requirements. For instance, a driver from New York with the minimum liability coverage of 25,000/50,000 for injury, $50,000/100,000 for death, and $10,000 for property damage or 25/50/10, can increase to 30/60/25 when traveling through North Carolina.
It’s also possible to be covered in a no-fault state, which requires personal injury protection even if your policy lacks it.
How should you review your auto insurance policy?
When reviewing your policy, be sure to note whether or not there is a broadening clause in place when traveling through another state. Also, note any exclusions or restrictions that put you at risk. States with very high minimum liability coverage limits are typically excluded from the broadening clause as those states bear too much of a financial risk to the insurance provider.
In addition, review the policy for restrictions that prevent other passengers from driving the vehicle without insurance protection. You don’t want to put yourself financial at risk for an accident caused by another passenger that drives the car for a short period of time.
It’s also important for car owners to have higher liability coverage levels if they have significant savings and assets to protect themselves if another party should try to go after their pockets.
What if your auto insurance policy is very restrictive for long distance travel?
Contact the insurance provider and explain the restrictive nature of the policy as it compares to the marketplace. If they will not budge, shop around for a new policy. There are plenty of other providers out there that can offer an attractive policy.
More Questions? Browse answers or ask your insurance questions online. Also, you can explore our tax research services online.
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