A car collision in Villisca, Iowa demonstrates a point about your car insurance coverage and whether or not you have adequate coverage. Here is the story as reported in the news.

A two car collision occurs when one of the cars fails to stop at a stop sign.  The police later determine the vehicle that failed to stop at the stop sign was stolen. Now let’s assume for the sake of this discussion that the vehicle that the at-fault vehicle is in fact stolen. What happens to the claims of the not-at-fault injured participants?

The participants who are not at fault will want to pursue their claims against the owner of the stolen vehicle; but that will go no where. For insurance coverage to apply to the at-fault acts of a non-owner, the driver must have permission to be driving the vehicle. Permission requires driving with the knowledge and consent of the owner. In this case the vehicle if stolen is not being driven with the consent of the owner. Isn’t that pretty much the definition of a stolen vehicle? It is so trust me on that definition. The owner’s insurance company will deny coverage because insurance coverage doesn’t apply to those who steal an insured’s car.

Now don’t go whining about how it’s not your fault and why should your insurance company have to pay. Trust me when it comes to whether you have coverage, fault has nothing to do with it. It’s a matter of contract language. The policy will govern coverage. After you have coverage then it’s a matter of fault and who which insurance company or individual gets to pay. And if that’s not enough to make you appreciate what I’m talking about then put the shoe on the other foot. By that I mean think of your car being stolen and whether your insurance company should cover a non-fault driver colliding with a stolen car that later is determined to be your own.  Right, now you understand.

Okay, so you’re scratching your head and asking me where you go from here. Well, our first target for insurance coverage will be the at-fault driver’s insurance coverage; but you can bet either of two things applies to him. First, it’s unlikely he has auto insurance. Second, if he does it’s not going to cover him while stealing cars.

You’re still scratching your head aren’t you? Well you should have collision coverage on your auto policy that will cover damage to your car. You should have medical pay coverage that covers your medical bills, to the extent you purchased it. If you purchased rental car insurance coverage that will be covered under your policy; it should be shown on the declarations page of your auto policy. And, your personal injury type damages along with lost wages and loss of earning capacity along with pain and suffering will be covered under the uninsured motorist provisions of your policy.

So how do you know if you are covered? Pull out your policy and read the Declarations Page of the policy. It will list the insurance coverage along with the dollar limits per type of claim made. So go do it and then ask yourself, if you have enough coverage for your own claims. If not call your agent and increase what you have.