There are stories and videos out there. People trying to climb steep hills off-road in shiny new 4WD vehicles, or people messing around on the street in their expensive sport cars or muscle cars and losing control and crashing. I’m just curious – does collision insurance typically pay for these expensive losses? Or do they leave owners hanging with no useable vehicle but perhaps still high car payments for years to come? Having a hard time picturing either of these possibilities working…
Collision also covers damage to your vehicle caused by colliding with objects (a tree or rock, for instance) or the ground (e.g., a rollover accident).
Most insurance policies will not pay out if illegal activity is invovled. So streaming yourself (or letting other people do so) while doing illegal things in your car would be a good way to void your insurance.
Former non-injury insurance adjuster reporting in.
First, of course, it’s going to depend on the carrier, and the optics of the case. Sometimes, a carrier will pay out even when not legally obligated to do so, due to the agent or carrier deciding “it would look bad” otherwise, but do expect a high chance of cancellation afterwards.
Second, remember almost all of those described issues would be classed as a Single-Car Accident. So, even if they pay out, and don’t cancel, expect your premiums to JUMP as almost all (tiny fraction of exceptions) single car accidents are classified as At-Fault accidents, which, depending on carrier, is enough to cancel or non-renew you.
Third, and final (and @Si_Amigo mentions this as I was typing) if you are engaged in any sort of illegal (deliberate as opposed to recklessness or carelessness) behavior while driving, or illegal intent will void your coverage as pretty much boilerplate insurance contact language. I’ve seen claims voided in the case of at least one driver who was speeding faaaaaar beyond the range of “reasonable use”. Specifically, street racing at speeds of 70 in a suburban 35 zone. IIRC we paid out on the liability (optics again) to the non-involved parties struck, but denied the Collision claim.
Doing something “reasonably” stupid but not illegal, not so much, but again, that AFA is gonna hurt.
A side note - if you buy/lease an expensive vehicle, depending on interest rates and down payment, you better hope you have payoff coverage on the insurance policy or through the dealership, or you’re likely to end up owing thousands of dollars or more on the car if it’s a total loss.
From a relative’s experience over two decades ago—if you drive your truck on a frozen lake and it ends up falling thruse the ice your insurance will NOT cover it.
There was a scene in Fried Green Tomatoes where formerly meek Kathy Bates repeatedly rams the car of some younger women who stole the parking space she was waiting on and also dissed her. Bates drives off, calling out that she doesn’t care because she has better insurance. I always wonder how she feels after she contacts her insurance agent.
Can one rent a proper race car, though? I figure you will need (or want) to spend tens of thousands of dollars on parts, tuning it up, etc. and you can’t just make whatever mod you want if you don’t own the car.
And I’m therefore 100% sure you’re reliable, and that you probably weren’t dealing with a scummy dealership that let you sign a written rejection of coverage to make your monthly payment look that much lower.
But, again, as a formal sales agent and later adjuster, I saw a metric ton of people buy policies juuuuuust long enough to get the car off the lot and then let said coverage lapse (one month / first and last month payment) with unsurprising results.
Heck, I had claims where the lienholder called in with no notification from the (prior) policyholder, because the car had been finally recovered (a long, slooooow process) and found it heavily damaged, and trying to confirm if there was any coverage on said vehicle.
It happens in the UK too. These days, the cops have access to an insurance database that will tell them if insurance is current. It’s not infallible but if you recently insured the car and can show them with whom, they will call them up and ask.
If you are not insured (or cannot prove you are) they will impound the car and leave you to make your own way home.
In the US, “car insurance” is really several separate things sold a la carte but often bundled together. Carrying liability insurance to pay for damage to others’ cars & bodies is legally mandatory. Carrying coverage for damage to your own vehicle (“comprehensive”) is legally not required, but most lenders require it as a condition of your loan or lease terms. Then there are additional types of insurances for various corner case situations.
It’s always important in conversations like this to keep the difference between liability and comprehensive and corner-case well in mind.
Here in FL the insurance companies are required by law to notify the state if liability coverage lapses for any reason. Which will result in a letter from the state telling you your vehicle registration and plates have been revoked and driving that car is illegal and it’ll be impounded if seen by a cop or parking enforcement agent.
There’s a rather involved process to get the state back off your back once you get insurance again.
That doesn’t stop a huge fraction of the “informal” part of the populace from driving without insurance. But it sure bites the regular folks if something goes awry with your car insurance.
AFAIK there is no similar requirement for insurance companies to notify the state (or the lienholder) of a lapse in comprehensive or gap coverage.
Not so different from us then. The minimum requirement, frequently called TP&T (Third Party and theft) covers the insured against third-party claims (including passengers).
Comprehensive is the most common because, for some strange actuarial quirk, it is often cheaper than TP&T.
One important difference is that here, insurance applies to the individual and any named driver for each car. So I am a named driver on my wife’s insurance (we used to be named on each other’s insurance until I sold my car).
Insurance for fleets and company cars is different and often covers “anyone driving with the knowledge and permission…”
Of course, if the car is being used for something illegal AFTER being stolen, will the owner’s policy kick in for anything? I would assume it would cover the damage to the car itself, but not to any cars hit by the thief, and I would assume it would not cover any other liabilities (e.g. thief drag races in stolen car, hits nearby vehicles, and strikes a pedestrian).
In other words, can the owner be sued by any of the thief’s victims?
A clever lawyer might well drag the owner into court on some pretext, e.g. negligent by leaving the keys in the car or something.
