How familiar are you with your personal auto policy? In this Maximum Octane throwback, Kim Hickey revisits her conversation with Richard Sharman, an ATI executive coach with more than 40 years in the collision and insurance claims world. It originally aired as episode 55, the second half of a two-part series on insurance.
This replay is worth a listen for anyone who has never read the fine print of their policy, which is most people. Richard explains state limits, what happens when someone is hurt in your car, comprehensive and collision coverage, why the minimum may not be enough, and what to consider before handing your keys to an employee.
This article is for general education only and is not legal or insurance advice. Talk with a licensed agent about your coverage.
What You Will Learn
- Do States have coverage limits?
- What happens when someone gets hurt in your vehicle
- What are comprehensive and collision limits?
- Does carrying the minimum protect you from being sued for larger amounts?
- A quick auto policy breakdown
- Some details of exclusions under liability to others
Why This Episode Is Worth Revisiting
Insurance is one of those topics people avoid until they need it. By then, it is too late to change coverage. Richard’s conversation gives listeners a practical framework for reviewing their policy now, while there is still time to make changes. For shop owners, it is also useful background for conversations with customers dealing with claims.
Most people buy auto insurance by comparing a few quotes and choosing the lowest monthly payment. That approach treats insurance as a commodity, when the details are what matter most after a serious accident. Two policies with similar prices can respond very differently when someone is injured or a lawsuit is filed. Richard’s experience on the claims side means he has seen what happens when coverage falls short, which is why his advice centers on understanding your policy before you ever need it.
A Quick Review of the Key Points
Richard covers several topics that every driver should understand:
- State coverage limits: states set minimum requirements, but minimums are not recommendations.
- Injuries in your vehicle: how medical bills are handled depends on your policy and state rules.
- Comprehensive vs. collision: different events trigger different coverage and deductibles.
- The minimum trap: carrying only the minimum does not protect you from being sued for more.
- Exclusions: certain situations may not be covered, including some uses of your vehicle by others.
Each of these points becomes clearer with an example. Imagine a driver who causes a multi-vehicle accident with injuries. Medical bills, lost wages, and vehicle damage for several people can add up quickly. If the at-fault driver carries only the minimum liability limits their state requires, the policy may pay out its maximum and stop, leaving the remaining amount as a potential personal claim. That is why many agents encourage people to look at what they own and what they earn when choosing limits, rather than starting from the minimum.
Comprehensive and collision are also often confused. In general terms, collision applies when your vehicle hits something or is hit, while comprehensive applies to events like theft, hail, fire, flooding, or a falling tree. Each usually has its own deductible. Exact definitions vary by policy, so the policy wording always governs.
The Declarations Page Is Your Starting Point
Around the 21 minute mark, Richard walks through a quick policy breakdown. The declarations page summarizes who is covered, which vehicles are covered, coverage types, limits, and deductibles. If you take one action after listening, find your declarations page and read it.
The National Association of Insurance Commissioners provides consumer guides and links to each state’s insurance department.
When you read it, look for a few specific items. Confirm that every driver in your household is listed correctly and every vehicle you own is included. Check the liability limits, which are often shown as a set of numbers for injury per person, injury per accident, and property damage. Note your comprehensive and collision deductibles and whether you carry coverages such as uninsured and underinsured motorist, medical payments, rental reimbursement, or towing. If any term is unclear, write it down and ask your agent. Reading the page once a year, ideally before renewal, keeps surprises to a minimum.
Before You Hand Over Your Keys
Richard’s point about letting an employee “get something for you real quick” in your personal vehicle is especially relevant for shop owners. Whether that situation is covered depends on your personal auto policy, your business policies, and how the vehicle is being used. Review it with your agent before it comes up.
Shop owners face this situation more often than most people. An owner might send an employee to pick up parts in their personal truck, ask a porter to run a customer’s vehicle to a sublet shop, or let a technician borrow a car for an errand. Each scenario can raise a different coverage question involving personal auto, commercial auto, and garage policies. Some policies treat regular business use differently from occasional use, and some exclude certain drivers. Rather than guessing, list the ways vehicles are actually used at your shop and review that list with your agent.
Common Insurance Mistakes to Avoid
One of the most common mistakes is choosing coverage based only on price. A lower premium often means lower limits, higher deductibles, or fewer coverages, and the difference may not be noticed until a claim. Another is setting a policy once and never revisiting it. Life changes such as buying a home, adding a teen driver, starting a business, or growing your savings can all change how much protection makes sense.
People also assume they are covered in situations they have never discussed with an agent, such as using a personal vehicle for business errands, lending a car to a friend, or driving a rental. Others skip uninsured motorist coverage without understanding what it protects. A final mistake is not knowing how to file a claim or what documentation to gather. Keeping your insurer’s claim number and your policy number in your phone, and knowing to take photos and collect information at the scene, makes a stressful moment easier.
Why This Matters for Shop Owners and Their Customers
Collision and repair shops talk with customers about insurance claims every day. A customer who has just been in an accident is often confused about deductibles, rental coverage, and what their policy will pay. Advisors who understand the basics can explain the process calmly and point customers to the right questions for their agent, without giving insurance advice themselves. That knowledge builds trust and makes the repair experience smoother.
Owners also have their own exposure to think about. Personal assets, business assets, employee drivers, and customer vehicles in your care all carry risk. Reviewing both personal and business coverage with a qualified agent, and making sure the two work together, is a responsible step for any shop owner. ATI members can learn about the insurance buying program for ATI members as one place to start a conversation about business coverage.
A practical way to begin is to schedule an annual insurance review on the calendar, the same way you would schedule equipment maintenance. Bring your declarations pages, a list of vehicles and drivers, and any changes in the business over the past year, such as new employees, a second location, or new services.
Take Action
- Pull your declarations page and confirm your limits and deductibles.
- Ask your agent whether your liability limits protect your assets.
- Clarify coverage when employees drive your personal or business vehicles.
Start with part one, Don’t Wait Until the Palm Tree Falls Into Your Car!, and continue with Donna Hazeltine’s Getting Ready to Face the What-Ifs of Life.
Frequently Asked Questions
What is the difference between comprehensive and collision coverage?
Collision coverage generally pays for damage to your vehicle when it hits another vehicle or object, or when it rolls over. Comprehensive coverage generally pays for damage from other events, such as theft, vandalism, fire, hail, flooding, or hitting an animal. Each typically has its own deductible, which is the amount you pay before coverage applies. Definitions and exclusions vary by insurer and state, so review your own policy and ask your agent how each coverage applies to your vehicles.
Is state minimum auto insurance enough?
State minimums are legal requirements, not recommendations. They are set to allow drivers to register and operate a vehicle, and in many cases they are low compared to the cost of a serious injury accident. If damages exceed your limits, you could be personally responsible for the difference. Many people choose higher limits, and some add an umbrella policy, based on their assets and income. A licensed agent can help you decide what level of protection fits your situation.
What is a declarations page on an auto insurance policy?
The declarations page is the summary at the front of your policy. It lists the named insured, covered drivers, covered vehicles, the policy period, each type of coverage you carry, your limits, your deductibles, and your premium. It is the fastest way to see what you have. Most insurers make it available online or through their app. Review it at least once a year and whenever you add a driver, buy a vehicle, or make other major changes.
Am I covered if my employee drives my personal car for a work errand?
It depends on your personal auto policy, any business or garage policies you carry, how often the vehicle is used for business, and whether the employee is an excluded driver. Some policies cover occasional permissive use, while regular business use may require commercial coverage. Because the answer varies by policy and state, do not assume. Describe the exact situation to your agent and get a clear answer before an employee takes your keys.
How often should I review my auto insurance policy?
At least once a year, ideally a few weeks before renewal, so there is time to make changes. You should also review it after major life or business events, such as buying a home, adding a driver, purchasing a vehicle, starting a business, or seeing significant growth in your savings or income. Each of these can change how much liability protection makes sense. A short annual conversation with your agent helps keep coverage aligned with your life.
