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Auto Insurance Exclusions

Ashley Kane

Car insurance exclusions are anything that isn’t covered on your policy. Exclusions are always spelled out in your policy contract, but they are sometimes overlooked. You want to be aware of these in order to understand your car insurance policy.

Types of Exclusions:

Exclusions are written into your auto insurance policy. Read over all your policy details to be sure you understand your coverage and what it entails. You do not want is to find out after it’s too late that your vehicle will not be insured for specific damages.

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  • Business Purposes/Livery Conveyance

If you use your personal vehicle for business purposes, you’re likely excluded from coverage on your own car insurance policy. If you use your car for delivery purposes, as a transportation service, lease it to others or have permanent business equipment installed in it, you need more insurance coverage to be protected. This includes pizza delivery, ridesharing services like Uber, installed snowplow equipment, or if employees operate the vehicle frequently – then you’ll likely want commercial coverage. Commercial car insurance will cover you in all of these cases. Just don’t assume your personal policy will protect your car or other drivers in such instances. The last thing you want is for an employee to be involved in a collision and find out that you’re liable for all the expenses.

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  • Named Insured Drivers, Permissive Drivers and Excluded Operators

When you bought your auto insurance policy, did you name any excluded drivers? Typically, permissive drivers (anyone you know and allow to drive your vehicle) are covered under your auto insurance policy. However, if you live with a high-risk driver and decide to exclude them on your contract so you can pay a more affordable rate, then you need to remember that fact months later when they ask to borrow your car. If any listed excluded drivers operate your car, they will not be covered by your policy, nor will your vehicle.

  • Physical Vehicle Damage

Standard vehicle damage is excluded on your auto insurance policy. For example, road damage to your tires and common wear and tear will not be covered. Nor will mechanical breakdowns or damage caused by unnecessary actions, such as drag racing. In addition, any additional custom car equipment will not be covered under your policy, unless you specifically spoke to your insurer about it and purchased add-on, special equipment coverage.

  • Types of Coverage

Depending on which types of car insurance are included in your policy, certain features will be included and excluded. Though this is common sense, some drivers make assumptions about what will be covered in their policy. For example, one might think that if they have collision coverage, their vehicle will be insured for flood damage because it relates to vehicle repairs. In fact, unless you have comprehensive coverage, the costs of a flood will be left up to you.

The same goes for bodily injury coverage. You may assume that such coverage will pay for your injuries in an accident when in actuality; the liability coverage only insures other drivers involved. Know what is included in the different types of coverage before eliminating any. Always ask questions to double check that you have the coverage you need.

Understanding what your car insurance doesn’t include can save you time and money. Have patience and read through your policy so you don’t accidentally violate the terms of your coverage.  Remember, providers may have different exclusions and the list above may not include them all. If you’re unsure whether or not your vehicle will be covered due to a certain situation, speak to your auto insurance agent and get the answers you need. Taking a little extra time to do so can pay off in a big way.