Forget It: Things Car Insurance Won't Pay For

By Posted : 11/11/2010

Exclusions can really trip up a car insurance claim. These provisions in an insurance policy define instances where an insurance company will not pay out claims you make following an accident or other event.

To find your policy's exclusions, read the fine print. You'll generally find that each section (liability, comprehensive, collision, uninsured motorists, etc.) lists its own exclusions.

Many insurance companies adopt sample car insurance policies offered by the Insurance Services Office (ISO), a statistical and actuarial reporting group for the insurance industry. These ISO policies feature standard exclusions - although some insurers add additional exclusions.

Exclusions may exist because policies are written for the average individual, and not every individual needs certain types of coverage, says Christopher Boggs, director of education for the Insurance Journal Academy of Insurance in San Diego.

In some cases, you can purchase additional insurance to cover these types of excluded items.

In other cases, damages are excluded because they are covered by another policy, such as a home insurance policy. For example, your home or renters insurance policy - not your car insurance policy - generally covers personal property in your car.

Four types of car insurance coverage

A personal auto insurance policy includes four types of coverage, each with its own exclusions, Boggs says. They include:

  • Liability coverage (Part A): Defines damage you do to others. Under Part A, coverage generally is excluded if the policyholder is responsible for any intentional bodily injury or intentional damage.

"If I run into you with the intention of injuring you or damaging your car, that's often excluded," Boggs says.

Business use of your personal vehicle represents another common exclusion. Delivering pizzas in your car? Your vehicle can be considered a "livery conveyance," and you may be driving around uninsured.

"If the pizza place charges the same price for me to pick it up as it does to have the pizza delivered, the vehicle is not considered a livery vehicle," Boggs says. "But if the place charges an additional price for delivery, that may result in [the vehicle being] considered a livery conveyance, and activate the exclusion. It may depend on local and state laws, but that's possible."

  • Medical payments (MedPay) coverage (Part B). Covers bodily injury medical expenses for you and your passengers, regardless of negligence in the crash. Again, an exclusion applies to vehicles being used for business at the time of the accident.

"If the vehicle is considered a livery conveyance, there's no medical payment coverage to the persons occupying the vehicle. That includes the driver of the livery vehicle, someone riding along -- even someone riding on the hood, " Boggs says.

  • Uninsured and underinsured motorists (Part C). There are exclusions for crashes you have with other vehicles you own - in other words, you can't claim yourself as an uninsured motorist.
  • Damage to your auto (Part D). This is more commonly known as "comprehensive" and "collision" coverage. Comprehensive coverage pays for damage to your car that isn't due to an accident with another vehicle. This includes fire, theft, vandalism, natural disasters, weather and collision with animals. Collision coverage pays for repairs to your own vehicle resulting from a car accident.

As with other parts of the policy, both comprehensive and collision exclude coverage if your car was being used for business at the time of the accident.

Exclusions under Part D include wear and tear to your vehicle, mechanical or electrical breakdowns, and road damage to tires. Items such as radios, stereos, navigation systems, personal computers and telephones are also excluded - these are covered under your home insurance.

In addition, the policy excludes custom furnishings and equipment to your car. For example, snazzy graphics and custom paint jobs added to your car are not covered. You'll need to buy an endorsement if you want insurance to pay to have such items restored after a crash.

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