Personal Finance

Is pothole damage covered -- and should you bother filing?

Question:  Explain what a road hazard means in auto insurance terms.   

Answer:  In the auto insurance industry, a road hazard can be anything in or on the surface of the road dangerous to you as a driver or cause you to have an auto accident.  

That could be a pothole, a nail, oil, a tree,construction debris , a deer running into the roadway or myriad other foreign objects that you can hit, or that can hit you.

Car insurance companies want you to be a safe, defensive driver who is observant and on the lookout for dangers on the roadway that may cause damage to your vehicle and avoid these perils if possible. Your auto insurance provider knows that avoidance isn't always possible and that you may need to make a claim under your physical damage coverage if you hit a road hazard.

For instance, potholes aren't always seen or unavoidable, but you can easily end up with a punctured tire, misaligned steering or damage to the underside of your vehicle. Or you might hit a patch of oil and lose control and hit a guardrail . Car insurance policies will cover such damages under your collision coverage if the damage is more than your collision deductible amount.

Whether a road hazard accident will fall under your collision or comprehensive coverage depends upon how the incident occurred.

If you hit a fallen tree or big rock in the road, then it's a collision claim because you collided with the object. Instead, if the tree fell on your vehicle or a boulder rolled onto the hood of your vehicle, then most auto insurers would find the accident to be a comprehensive claim.

Whatever the damage, if the cost of repairs is minimal, it might not be worth filing a claim with your auto insurance provider, either because it doesn't reach your deductible amount or is barely above it.

I'd recommend that you pay out-of-pocket for your minor repairs and leave car insurance claims for expensive damage you can't afford to fix on your own.

While comprehensive claims don't typically raise your rates, collision claims can, and either type of claim may get you surcharged by your insurer if you have accumulated several claims (of any type) within a short period of time.

Outside of the insurance industry, you may also hear the term road hazard in regards to coverage you can obtain when purchasing new tires. This isn't part of an auto insurance policy but a warranty with an outside company that will repair or replace your tires if they receive certain damages caused by objects in or on the roadway. The cost of a road hazard warranty varies but typically it will cost you around $10 to $20 per tire for the coverage.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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