What you don’t understand about auto insurance could cost your money. Here are 5 things that you need to know about your auto insurance policy.

That new car you just bought may not be covered. Your existing auto insurance policy may cover your new car if it is a replacement for another vehicle, but only for a specified period of time. Therefore, it is important to notify your insurance company of the change as soon as possible. Also, since the make, model and age of your car are taken into account when setting auto insurance prices, your premium may change. If the new car is not a replacement vehicle but a first car or an additional car, you will need to arrange for auto insurance coverage before you take possession of the vehicle.

You may not have coverage if you lend your car to a friend or family member. Under the permissive user rule, your auto insurance policy generally will cover your car when you occasionally lend it to a friend. However, if your friend uses your car regularly or you let someone in your household who is not a listed driver on you auto insurance policy use your car, your policy may not cover them. If you are uncertain about coverage when lending your car, check with your insurance company first. Also, if you lend your car and it is in an accident that results in a claim with your insurance company, it will be on your record and could result in higher premiums.

Paying your electric bill late could boost your auto insurance premiums. One of the many factors most auto insurance companies now use when setting your premiums is your insurance credit score, which takes into account some of the same factors (such as whether you pay your bills on time and how much debt your have) used to calculate your credit score.

You may not be covered if you hit a deer or your car is damaged in a hail storm. Collision coverage does not cover your car for damage resulting from weather events such as flooding, wind or hail; collisions with animals; vandalism; or fire or if your car is stolen. You need comprehensive insurance coverage to pay for damage or loss in these situations.

Your personal auto insurance policy may not cover your car when it is used for business. This can be a grey area, especially for the self-employed, so it is a good idea to talk to your insurance agent about when and how your personal car may be used in your business to determine whether you need commercial coverage.