Why Does My Auto Insurance Policy Have Exclusions?
Auto insurance policies are broken down into sections so that both the insured and the insurer are aware of their rights and responsibilities. This includes a list of exclusions, or specific situations where no coverage is provided under a policy. These situations can include when certain types of property contained in or installed on the automobile are stolen or damaged, when the vehicle is operated under certain conditions, or when it’s operated by specific people.
When a motorist purchases a liability auto insurance policy with minimum coverage, for example, certain damages will fall outside of the coverage range. Under a minimum liability policy, only other parties’ bodily injury and property damages that were caused by the driver are covered. Damage to the policyholder’s vehicle and self are excluded unless additional, first-party protection is purchased.
However, liability insurance still typically includes various exclusions. For example, damage caused intentionally by the insured or caused by someone who used the insured automobile without permission of the policyholder will be featured on the list of exclusions. Similarly, other coverages like medical payments coverage will not pay for injuries sustained on a vehicle with less than four wheels, as a result of a nuclear hazard, or during a prearranged racing contest.
To be better protected behind the wheel and avoid having coverage excluded, vehicle owners have the option of purchasing additional, and often recommended insurance coverage for an added cost. Comprehensive and collision coverage, for example, cover damage to the policyholder’s own vehicle. This includes damage caused by a collision with another vehicle, as well as damage caused from falling objects, fire, flooding, theft, and vandalism. Additionally, medical payments coverage can help motorists pay various medical expenses after an accident. Drivers should know, however, that added protection may also be subject to a list of exclusions, and it’s important to be aware of any that exist.
Although the majority of exclusions are created by the coverage provider, motorists have the ability to specifically exclude other motorists from a policy. The driving records of other motorists living in the same household as the insured can negatively affect a person’s premium. This can be especially true when parents or guardians add a teenager to their policy. Residents can usually save money by specifically excluding high risk drivers, and but they should take seriously the fact that any damage caused by those drivers will not be covered.