Home and Auto Insurance Confusion

iStock_000020338778XSmallIf you have ever had your car broken into, you probably have some insight into the potential overlap between a home insurance policy and an automobile insurance policy. While the intent of each policy is to not create any duplication or gaps in coverage, the actual application of coverage in a claim may create some confusion for the average consumer. When a claim involves an automobile and property that is not physically part of auto, it’s likely that another insurance policy will be involved. Understanding these distinctions can help you prevent the problem of items being uninsured in the event of a loss.

The most common interplay between the two policies is when your automobile is broken into or stolen. While your automobile insurance policy will cover the damage or theft of the auto, it will not cover what it considers to be personal property within the auto. This means that items not permanently part of the automobile would need to be covered by your home insurance policy. For example, if your golf clubs or laptop computer were in the trunk but were stolen along with your auto, you would need to file two separate insurance claims: one with the auto insurer and one with the home insurer. Unfortunately, this also means that you are faced with two deductibles as each policy will assess its own deductible.

If you find that you are regularly transporting your personal property, it’s a good idea to review your home insurance policy to determine the adequacy of your coverage. When your personal property is in your automobile or anywhere outside of your home, it’s generally more vulnerable to loss or damage. Inasmuch, with this higher risk, you should see if your home insurance policy’s coverage is sufficient for your needs. However, you should definitely know that you will not be able to pursue this claim on your auto insurance policy.

Another scenario where the two policies are triggered is when an automobile impacts a house. Unfortunately, this is not as uncommon as you might think. Cars that lose control sometimes will drive right into a house and cause substantial damage, if not injury and death. In these situations, it’s clearly a case of automobile liability. However, the homeowner with the damaged house may find it easier and more desirable to go through his own home insurance policy to resolve the damages. The home insurance policy will then subrogate against the driver’s automobile liability insurance policy to recover the amounts it paid.

On the other hand, if you are a homeowner and you somehow cause damage to another person’s car while you are not operating a vehicle, this will be a home insurance claim. For example, if you are trimming the trees in your yard and you drop a large branch on a parked car on the street, the damage to that car is your fault. You will need to report the claim to the personal liability coverage section of your home insurance policy and your insurer will resolve the matter with the automobile’s owner.

As you can see, it’s not unusual for more than one insurance policy to respond to a claim for damages or injury. Understanding each policy’s obligations will help you to properly insure your own exposure.

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