Car Insurance FAQs

Car insurance does cover flood damage, but only if you have comprehensive coverage. Standard liability or collision policies typically do not include protection against natural disasters like floods.

Key things to keep in mind:

• Comprehensive coverage is required: This is the only type of auto insurance that pays for water damage from rain, storms, or floods.
• Total loss risk: Because floodwater can ruin a vehicle's engine, electronics, and interior (often causing mold or rust), submerged cars are frequently declared a total loss.
• Proactive planning is necessary: Insurers often implement "binding restrictions" when a storm is imminent, meaning you cannot add comprehensive coverage once a flood warning has been issued for your area.
• Claims process: Filing a flood claim involves documenting the damage and working with an adjuster. Note that processing times may be longer after major regional weather events due to high claim volumes.

Read our full article: does car insurance cover flood damage?

Whether hail damage is covered by your car insurance depends entirely on the type of policy you have. Standard liability coverage, which is the legally required minimum in most states, does not cover weather-related damage to your own vehicle. Only comprehensive coverage protects against hail, along with other non-collision events like floods and theft. It's an optional add-on that typically costs just a few hundred dollars per year.

Key things to know about hail damage and car insurance:

• Comprehensive coverage is the only policy type that covers hail damage to your vehicle.
• Your deductible applies first; insurance only pays the remaining approved repair costs.
• The maximum payout is capped at your car's actual cash value, which accounts for depreciation.
• Filing a hail damage claim may raise your rates, depending on your insurer and claims history.
• Adding comprehensive coverage is relatively affordable, and discounts can reduce the cost further.

Read our full article: does car insurance cover hail damage?

Your personal auto insurance will most likely extend to a rental car if you carry liability, collision, and comprehensive coverage, though you'll only be protected up to your existing policy limits. It's potential damage to the rental car itself that creates complications, since collision coverage is needed for that to apply.

When you may want to buy rental car insurance

• If your policy only has liability coverage, consider the collision damage waiver to protect against damage to the rental car itself.
• If your liability limits are low, such as a state minimum of $15,000, you could be personally responsible for any costs beyond that amount.
• If you're renting internationally, most U.S. policies won't extend coverage outside the country.
• If you're renting during severe weather conditions, extra coverage may be worth considering.
• If you're in an accident, the rental company can hold you responsible not just for damage but also for lost rental income, administrative fees, and diminished vehicle value.

Read our full article: does car insurance cover rental cars?

Car theft and vandalism are covered under comprehensive car insurance, which is an optional add-on to your policy. Without it, you won't be reimbursed for a stolen vehicle or damaged parts. It's also worth knowing that personal belongings inside your car are not covered by any auto insurance, and that liability insurance provides zero protection against theft.

Key coverage details to know:

• Comprehensive insurance pays the actual cash value of your stolen vehicle or stolen/damaged parts like rims.
• Personal items stolen from your car (laptops, bikes, cash) must be claimed through homeowners or renters insurance.
• Gap insurance covers the difference if you owe more on a loan than your car's actual cash value at time of theft.
• Custom parts and equipment coverage is needed for aftermarket modifications beyond what comprehensive covers (typically up to $1,000).
• If your car is stolen, immediately file a police report, notify your insurer, and contact your lender if applicable.

Read our full article: does car insurance cover theft?

Car insurance typically follows the car, meaning coverage is tied to the specific insured vehicle, regardless of who's driving. 

There are some nuances:

• When insurance follows the car: If you give someone permission to drive your car, or if a driver is part of your household, they're generally covered by your policy. Coverage won't apply if you've excluded a person from your policy, someone takes your car without permission, or the car is used for ridesharing or a paid car-sharing service.
• When insurance follows the driver: If you rent a car for personal use, your personal policy typically covers you, so you can skip extra rental insurance. That said, if you only carry liability coverage, additional rental protection may be wise.
• If someone borrows your car and crashes: With permissive use and full coverage, your car is generally protected. With liability-only coverage, your vehicle isn't protected from damage, but your liability insurance should cover injuries or property damage to the other driver.

Read our full article: does car insurance follow the car or the driver?

A car insurance premium is the regular payment you make to your insurer to keep your policy active. The cost is shaped by a range of personal and vehicle-related factors, and understanding them can help you make smarter coverage decisions and potentially lower what you pay.

Ways to save on your premium

• Ask about discounts for safe driving courses, anti-theft devices, or good grades
• Pay your full premium upfront rather than monthly to unlock a common discount
• Raise your deductible to reduce your upfront cost
• Review your coverage and drop anything you no longer need
• Bundle auto with home, renters, or life insurance through the same carrier

Read our full article: what is a car insurance premium?

Car insurance rates typically begin to decrease as drivers reach age 25. However, rates continue to decline gradually through middle age, reaching their lowest point for drivers between the ages of 60 and 74.

Key milestones:

• Age 16: Generally the most expensive age for car insurance due to a lack of experience and higher risk levels.
• Age 20: Teenagers often see their first significant rate drop once they leave their teens, provided they have a clean driving record.
• Age 25: Widely considered the "milestone" age where premiums drop because drivers are statistically seen as more experienced and less likely to engage in risky behaviors.
• Age 60-74: Statistically the age bracket with the lowest average monthly premiums (around $96).

Read our full article: what age does car insurance go down?

Car insurance rates have climbed significantly in recent years, with an average increase of 17% over the past year alone. A combination of broad economic forces and specific industry pressures are driving the surge, and rates show no sign of retreating without deliberate action on a driver's part.

Key reasons rates are rising

• Inflation raised the cost of vehicles, parts, and repair labor, with vehicle repair costs up over 36% between 2021 and 2025
• Post-pandemic traffic rebounded, sending accident and claim rates back up
• Climate change is fueling more natural disasters, increasing claim risk across the board
• Auto theft has surged, with catalytic converter theft up roughly 290% since 2020 and over 850,000 cars stolen in 2024
• Supply chain disruptions and rising vehicle prices (used cars are about 23% higher than in 2019) made repairs and replacements costlier

Read our full article: why are car insurance rates going up?

A car insurance deductible is the out-of-pocket amount you pay toward a covered claim before your insurer picks up the rest. The choice of deductible amount is yours, typically ranging from $100 to $2,000, and it directly affects your premium: higher deductibles mean lower premiums, and vice versa. Deductibles apply only to comprehensive and collision coverage, not liability.

Key things to know about car insurance deductibles

• You pay your deductible every time you file a claim, unlike health insurance where it resets annually.
• Raising your deductible from $250 to $500 can cut premiums by 15–30%; going to $1,000 could save 40% or more.
• You may not owe a deductible if another driver is at fault, if you only damage their car, or if a liability claim is filed against you.
• A "disappearing deductible" program can reduce your deductible over time for claim-free driving.
• If you're financing or leasing, your lender may dictate the deductible amount you must carry.

Read our full article: what is a car insurance deductible?

Collateral Protection Insurance (CPI), also called force-placed or lender-placed insurance, is a policy that auto lenders can add to a borrower's loan when the borrower fails to maintain adequate car insurance. It protects the lender's financial interest in the vehicle, not the borrower's, and it typically costs more than a standard policy since pricing is based on the loan amount rather than driving history.

Key things to know about CPI

• Lenders can add it if your coverage lapses, is insufficient, or you can't provide proof of insurance
• It typically includes both collision and comprehensive coverage
• Your monthly loan payment increases to cover the premiums, and it can be backdated to cover months without insurance
• The only way to remove it is to obtain qualifying insurance and provide proof to your lender
• If added in error, you're entitled to a refund after proving you had continuous coverage

Read our full article: what is a collateral protection insurance?