1.
Most insurance companies today require that anyone in your household (family or simply roommates) be added to your policy or excluded from coverage as drivers.
A client of mine had a roommate who was excluded as a driver.
That roommate never drove the car..
..
except one time.
I don't know why the owner let his roommate drive...
perhaps because he was just going down the street.
Regardless, his roommate ran into another car at 40 miles per hour.
The other car was a total loss and the other driver had some injuries.
Guess who was responsible for paying the other person's car and injuries? My client (and the driver)! Imagine how much money replacing a car and paying the hospital bills for someone else amounts to.
Not to mention his car was still ruined.
How you can avoid this: It may cost nothing to add family or roommates to your policy.
In fact, it may actually bring your premium down if they're a better or more experienced driver than you.
So, get them added or make sure they never drive your car.
2.
Another client had a ridiculous H2 (Hummer) with huge rims, expensive tires, chrome everywhere, expensive stereo...
really over the top.
Apparently he misjudged the depth of a certain stream.
The H2 got stuck underwater.
He came out okay (just a little wet) but his car was a total loss.
He did have property damage coverage so he only had to pay his deductible to get his car replaced.
However, he did not have the extra coverage for his aftermarket rims, chrome accessories, or expensive stereo which would have cost him only a few more dollars.
He got his car back but it was just the stock model.
How you can avoid this: If you have any aftermarket equipment (anything that didn't come on the car from the dealership) of any substantial value (generally over $100) ask your insurance agent/company if you need to purchase additional coverage.
It's typically inexpensive.
3.
Murphy's Law (anything that can go wrong, will) applies especially with car insurance.
A number of my clients were late on making their car insurance payments.
Their coverage expired as a result.
Sure enough, they caused accidents during that small window of no insurance.
They were responsible for the costs of everything.
They inevitably asked the insurance company to "help them out just this one time" but with no luck.
How you can avoid this: Be sure to pay your insurance bill on time! It works the same as your electricity bill.
If you don't pay your electricity bill, your electricity gets turned off.
Same with insurance.
They "turn off" your insurance if you don't pay them.