Car Insurance Exclusions Explained

Learning about car insurance

You might expect your car insurance to protect you in every possible situation. After all, that’s why you pay all that money every month, right?

Well… no. If you read the fine print in your policy, you’ll come across dozens of car insurance exclusions. These are all the things your insurance won’t pay for. And it’s better to know what these exclusions are now, rather than waiting until you have to file a claim.

What are Car Insurance Exclusions?

Simply put, a car insurance exclusion is language in your policy that outlines what’s not covered. Certain drivers and vehicles may be excluded from coverage. Some situations may be excluded from coverage.

To put it simply, if you file a claim that arises from one of these exclusions, it’ll be denied.

There are essentially two types of car insurance exclusions: standard exclusions that appear in most policies, and special exclusions that are specific to your individual policy.

Common Car Insurance Exclusions

One of the most common car insurance exclusions is a named driver exclusion. This means your policy states that one or more members of your household is not covered by your insurance.

Let’s say your spouse has a terrible driving record and would cost you hundreds per month to insure. Or maybe your 20-year-old son got a DUI; to avoid paying sky-high insurance rates, you might exclude him from your policy. It can be a smart financial decision to take a high-risk driver off your policy — but that driver needs to know the rules! If they drive your car anyway, they’re driving uninsured, which is illegal.

Here are just a few more exclusions you’re likely to find in your car insurance policy.

  • Intentional acts: Get so mad at your ex that you ram their car into a tree? Car insurance won’t cover an insured person’s intentional acts that cause bodily injury or property damage. (Note that “intentional” applies to the intent to cause damage or injury, not things like driving faster than the speed limit.)
  • Using a vehicle without permission: If you drive a vehicle that doesn’t belong to you without a “reasonable belief” that you’re entitled to use it, then your car insurance won’t cover you if you get into an accident while driving it. This exclusion typically doesn’t apply to family members using your vehicle. So, if your teenaged daughter takes your Jag for a joyride and crashes, that shouldn’t be excluded.
  • Normal wear and tear or breakdowns: Your policy states specifically that it won’t pay for damage caused by wear and tear, freezing, or mechanical problems.
  • Non-permanent electronic equipment or vehicle modifications: Your auto insurance may not cover electronics in your car, or custom graphics, furnishings or equipment. You’ll need an insurance endorsement to cover those modifications.
  • Specific vehicles: Motorcycles, off-road vehicles, snowmobiles and other vehicles are usually excluded from coverage.
  • Racing vehicles: Your policy probably excludes coverage for any vehicle used in racing or other competitions.

Medical Payment Exclusions

If your auto insurance policy includes medical payments (med pay) coverage, you’ll see a few more exclusions listed there. Med pay coverage is intended to help pay for your and your passengers’ medical expenses following an accident, whether it was your fault or someone else’s.

However, there are some situations in which this coverage will be denied. Medical payment exclusions may include:

  • Using a vehicle for business purposes
  • Using a vehicle for racing, stunts or other competitions
  • Using a vehicle without the permission of the owner
  • Using a vehicle that’s not a passenger vehicle (such as an ATV or motorcycle)
  • Any injuries that occur while you’re living in your vehicle
  • Any injuries resulting from a nuclear reaction or radiation
  • Situations in which workers’ compensation will pay for your medical care

Liability Exclusions on Car Insurance Policies

Liability insurance is the part of your policy that pays for the losses of other people, whether injuries or property damage. Liability exclusions in your auto insurance address situations in which those losses won’t be covered. Some examples include:

  • Business use exclusion: Your liability insurance won’t cover losses that occur while you’re using your vehicle as a rideshare conveyance, for making deliveries, or for other such business uses. If you are a rideshare or delivery driver, you’ll need a special endorsement on your policy to cover you.
  • Household or family exclusion: This liability exclusion says that your insurance won’t pay for damages claimed by a family member who was in the same vehicle as you, the insured driver. This exclusion is meant to deter fraud — like a staged accident after which your spouse sues your insurance company for damages.

Commonly Excluded Vehicles

Standard auto insurance policies are intended to protect standard vehicles: cars, pickup trucks, SUVs, etc. Unless you have a special endorsement for a non-standard vehicle, your auto insurance probably lists certain vehicle exclusions:

  • Vehicles with fewer than 4 wheels (like motorcycles or mopeds)
  • Vehicles that aren’t supposed to be driven on public roads (like ATVs or golf carts)
  • Vehicles used for racing
  • Vehicles owned by you or a family member that aren’t specifically covered in your policy
  • Vehicles used for business purposes

If you have a question about any exclusions in your car insurance policy, ask your insurer! You don’t want to file a claim for something that’s not covered and have it denied.

And if you’re less than thrilled with your insurance company’s service, maybe it’s time to switch. Compare.com customers save an average of $720 a year on their car insurance by comparing quotes.

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