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If you have purchased comprehensive auto insurance, flood damage to your car is covered. Comprehensive insurance pays for repairs or pays the actual cash value of the car at the time of the flood if the car is totaled.
Flooding is more common than you might think, so it is prudent to know what to do if your car is caught in a flood and the role insurance plays afterwards.
Full insurance claims have a deductible
Comprehensive insurance covers damage to your car caused by flooding, as well as other issues such as car fire, vandalism, hail, and car theft.
A claim on property and casualty insurance will have a deductible. A deductible is the amount deducted from your insurance claim check. For example, if you have a $ 500 deductible, your insurance company will write a check for flood repairs to your car less the $ 500 deductible.
Are you unsure of the deductible you have for your comprehensive insurance? Consult the declarations page of your insurance policy.
The average cost for comprehensive auto insurance is about $ 168 per year, according to the National Association of Insurance Commissioners.
Collision coverage bundled with comprehensive coverage
If you have comprehensive coverage, chances are you have collision coverage as well. These two types of auto insurance are often bundled together by auto insurance companies and work together to cover repairs to your car. They supplement your liability coverage, which is required in almost all states to drive legally, and only covers injury you cause to others and damage you cause to their property.
Collision insurance pays for damage to your car if your car hits an object or another car, regardless of who caused the accident. The average cost of collision insurance is about $ 378 per year, according to the National Association of Insurance Commissioners.
If you finance or lease your car, your auto lender or leasing company probably requires that you have both comprehensive and collision insurance. When you pay off the auto loan, you can decide whether you want to continue to purchase these coverages or whether it is time to drop the All Perils and Collision Coverage.
Other types of auto insurance
Here are three other types of important vehicle coverage.
Liability insurance is required in most states and is generally the most expensive part of an auto insurance policy. Liability insurance pays when you are responsible for a car accident and cause injury to others or damage to property. Liability insurance also pays for legal costs if you are sued due to a car accident.
Rent reimbursement is also known as freight cost coverage. This coverage pays for reimbursement of rental cars and transit costs while your car is in the repair shop for a covered insurance claim. Rent reimbursement coverage does not come with a deductible. It is optional and is in addition to a policy at an additional cost.
Gap insurance is coverage that covers the difference between what you owe on your loan and the value of your totaled or stolen vehicle. For example, if your car is flooded, gap insurance pays the difference between the actual value of the car and what you owe on the car or on the lease. Let’s say you have a loan of $ 25,000 and your car is worth $ 22,000. If this car is totaled, you will still owe $ 3,000 to your lender. Gap insurance pays that $ 3,000 so you don’t have to.
Gap insurance can also be applied if your car is stolen and not recovered.
To be eligible for gap insurance, you must first purchase comprehensive insurance and collision insurance on your car.
Beware of flooded cars for sale
Cars damaged by flood water often find their way into the market. According to Carfax, 446,836 flood damaged cars were on U.S. roads in 2020.
If an insurance company totals a vehicle after a flood damage claim, it will issue a salvage title. This means that the car cannot be driven until it has been repaired, has passed an inspection, and has been renamed. The new title will state that the vehicle suffered significant damage and has been rebuilt.
Salvage cars are typically auctioned off to parts dumpsites or to dealerships who will rebuild them, but can be sold to private buyers if the title shows there has been flood damage.
State regulations and laws regarding titles differ, with some states being more lenient than others in their definition of salvage cars. This means that sometimes flood damaged cars get fame during multiple sales, often across state lines, and end up with a title that does not disclose the damage.
Flooded cars are also cleaned and sold on the private market by unscrupulous owners who fail to notify unsuspecting buyers of the damage.
Vehicles damaged by flooding can rot from the inside out, sometimes gradually, and have mechanical, electrical, and safety systems that can fail at any time, so you naturally want to avoid buying one. This means avoiding cars with salvage or rebuilt titles.
But how do you know if a car has been flooded? A musty smell, damp or mismatched carpets, rust around the doors and pedals and inside the hood, and mud under the seats are all signs that you are looking at a flooded car.
It is wise to check the vehicle history report through a company such as Carfax or by using the free service of the National Insurance Crime Bureau. VINCheck, which displays a car’s history when you enter its vehicle identification number. Another source for searching the history of a vehicle is the National Motor Vehicle Title Information System website.