Auto Insurance Exclusion
An auto insurance exclusion is a provision that is written into your car insurance policy that excludes coverage for a particular driver or situation.
It’s important to know what an exclusion is and which exclusions might be written into your policy so you make sure you have the coverage you need if and when an incident occurs.
What Is an Exclusion?
An exclusion is anything that is specifically not covered by your car insurance policy. They are listed in your policy in the Exclusions section.
Types of car insurance exclusions include, but are not limited to:
- Individual drivers. For example, you and your insurer may agree to exclude a high-risk driver in your household to save you money on your premium. (See “Named Driver Exclusions” below.)
- Certain types of damages or injuries. For example, a liability property damage policy will exclude damages you cause to your own vehicle in an accident, since liability policies only cover damages and injuries to other drivers in accidents you cause.
- Weather events or natural disasters. For example, if you hold only collision insurance, don’t expect your damages to be paid for after a hurricane. This will be excluded; you need comprehensive coverage to pay for these types of incidents.
Continue reading for more information on the types of exclusions you might see in your car insurance policy.
Named Driver Exclusions
Named driver exclusions occur when your policy specifically does not cover a specific, named individual.
In general, most car insurance policies automatically cover every licensed driver living in your household; unfortunately, if you live with someone whose driving record is riddled with tickets or accidents, you can end up paying higher rates for their past mistakes.
However, in most cases you can choose to exclude her from your policy. It is important to understand, though, that this means she CANNOT drive your car. If she does, she will not be covered, meaning if she gets into an accident you’re on the hook for paying costs out of pocket.
Also, you might simply live with someone who you know will never need to drive your vehicle. If this is true, you can also elect to exclude him. Always consider this option carefully, however. You may not think this driver will never need your car, but emergencies do arise and he might need to drive your vehicle at some point.
NOTE: Some states and companies don’t allow you to exclude drivers on your policy. Speak with your auto insurance agent if you are considering excluding a driver.
Other Types of Policy Exclusions
Policy exclusions aren’t limited to specific drivers in your household. Commonly, insurance policies will exclude coverage for:
- Livery conveyance. Some insurance companies will not cover you if you are involved in an auto accident while using your car or truck to carry passengers or materials for compensation.
- Fraud. Intentional damage is typically excluded in any car insurance policy.
- Certain vehicles. Some vehicles, such as those you regularly use but aren’t listed on your policy, may be excluded.
- Vehicle types, such as motorcycles, will likely not be covered under a car insurance policy. You’ll need a motorcycle endorsement for that.
- Certain uses of your vehicle. For example, drag racing is another auto exclusion that your car insurance company might write into your policy.
- In this case, your car insurance company would not cover you if you are injured while drag racing.
- Catastrophes. Damages caused by specific catastrophic events, such as nuclear exposure, will generally be excluded under your policy.
- Custom equipment. Without a custom parts and equipment endorsement, your custom equipment is unlikely to be covered.
The above is not an exhaustive list of exclusions. Speak with your agent to learn what is and is not covered in your car insurance policy.
Understanding Your Car Insurance Policy
All exclusions are written in your insurance policy, even if they’re not that easy to find.
Always read the fine print of your policy so you know exactly what is excluded. If you don’t know what’s excluded, you may end up thinking you’ve got coverage and finding out when it comes time to pay for damages that you don’t.
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Amanda Lautieri Limited Lines Auto Agent