Most auto insurance policies can cover many of the perils you’ll find out on the road, from collisions to hail storms. However, like any insurance policy, there are some common auto insurance exclusions you’ll want to be aware of. It’s important to understand your auto insurance coverage, so that you know what’s covered and what’s excluded, in the case of an uncovered incident. Read on for tips to help you make sure you’re covered for the risks you may face when on the road.
What’s excluded from auto insurance?
1. Theft of personal belongings in car
Comprehensive auto coverage can help cover the costs to repair or replace your vehicle if it is vandalized or stolen, up to your limits and subject to your policy coverage and deductible. However, this generally does not include any personal belongings that were stolen from your car or lost if the car itself is stolen. That means if someone smashes your window to grab your computer sitting in the back seat, your comprehensive coverage would likely repair the broken window (minus your deductible), but it would not reimburse you for the computer that was stolen.
Your contents coverage through your renters or homeowners policy would likely step in to cover any stolen items, generally. So, although your auto insurance wouldn’t cover these belongings, you can check with your homeowners or renters insurance for coverage.
P.S. Make sure you lock your car doors and hide any valuables whenever you leave your car parked anywhere. This is especially important during the holiday season, as theft of shopping bags from the back seat is particularly common.
2. Custom parts and equipment
Usually, basic auto insurance policies will cover the basic equipment that comes with your car’s make and model. For example, if you have a GPS built into your car, your auto insurance would likely help cover the cost of repairing or replacing that system if it is damaged in a covered loss.
However, custom equipment is usually excluded from auto insurance policies. Excluded custom parts/equipment can include:
Detachable stereo equipment
Custom in-vehicle communication systems
Aesthetic custom enhancements like rims, grilles, paintings, spoilers
Custom performance enhancements like high-performance exhausts
Even wheelchair lifts and equipment for individuals with disabilities may not be covered with a basic auto insurance policy.
Hope is not lost for your unique vehicle, though! You can purchase an add-on custom parts and equipment coverage (similar to motorcycle customization coverage). This will itemize your vehicle alterations, so they can be covered in the case of a partial or total covered loss.
Speak with a licensed insurance agent today to better understand what your policy may or may not cover. Give us a call today at (844) 300-3364.
3. Non-named drivers of car
A common unexpected exclusion is non-covered drivers. It is possible that, even if you give someone permission to drive your car, if that driver is not specifically listed on your policy, that driver could be excluded from your auto’s insurance policy.
For example, you own a truck and you are the only listed driver of the truck on your auto policy. You let your friend regularly borrow your truck to run errands, and he causes an accident with another car. Since he’s not listed as a driver on your policy and regularly uses your car, it is likely that your insurance won’t cover the damages and bodily injury caused to the other party in the accident. This could land you hundreds of thousands in the hole—just because you let an unlisted driver use your truck.
Bottom line: you should consider adding anyone who drives your car to your car insurance policy.
4. Delivering a pizza (and other business use)
Typically, your standard auto insurance will not cover your car while you’re using it for business or commercial purposes. This can include delivering products, like when you’re working as a restaurant delivery driver or driving for a ride-sharing app, your insurer likely won’t cover any damage or liability for an accident that happens while you’re using your car for business. This can be true even if you only use your car for business part-time.
If you use your car for work in any capacity, you should consider purchasing a commercial auto policy to ensure your car, business, and personal assets can be protected. Certain ride-sharing apps may also offer their drivers commercial coverage when logged into the app, and some insurers offer specific limited insurance for ride-share drivers. Make sure you have coverage for your auto while you’re on the clock through your employer or personally, so you don’t get stuck with damages or liability while working.
5. Car loan payoff
Your car gets stolen or completely totaled. You were financing your car. If your auto policy pays out with actual cash value (which most do) they are paying you only the value of the car immediately before the loss. A basic car insurance policy generally does not provide replacement cost coverage. Because of this, the payout you receive from your insurer could end up being lower than the amount you still owe on your car loan. This is especially true if you made a small down payment and have a longer loan period.
If you’re financing or leasing a car, gap coverage can end up being a lifesaver. Gap insurance can help pay the difference between the insurance claim payout and your outstanding loan balance. You can usually buy gap insurance as an add-on to your auto insurance policy. Chat with your InsuraMatch agent to see if gap insurance would be right for your financed car. Call us today at (844) 300-3364.
6. Certain vehicles excluded from auto insurance
Certain vehicle types are excluded from typical auto insurance policies, like off-road vehicles, vehicles with fewer than four wheels, vehicles not allowed on public roads, and RVs.
In most cases, this won’t be a concern for you. If you’re looking to insure a vehicle, you have to tell your agent the make and model, so they’ll let you know if your vehicle isn’t covered for some reason. They’ll then be able to help you find the right policy for you, like a recreational vehicle policy or ATV/off-road vehicle insurance.
Have a motorcycle, off road vehicle or RV to insure? Give us a call at (844) 300-3364.
Psst… Check out these tips to keep your favorite vehicles and toys safe.
Most auto insurance won’t cover any accidents that occur while racing your car. This can include any damages to your own car and liability if you cause damage to someone else or their property. If you plan to race your car, you may need to purchase specific racecar or motorsports insurance.
8. Driving outside the U.S.
Most auto insurance does not provide coverage if you have an accident outside of the United States. For example, if you have an accident while driving in France while on vacation, your auto policy may not cover any claims. If you plan on driving out of the country, check with your insurance agent to see what your auto insurance will and won’t cover.
9. Wear and tear
Auto insurance policies don’t cover normal wear and tear on your vehicle, including tire wear. It also won’t cover any mechanical failures or regular maintenance on your car. The best way to minimize wear and tear is with annual visits to the shop and ongoing upkeep.
10. Certain catastrophic events
These are events we never think we’ll run into… until it’s too late (did you ever think you’d live through a pandemic?). Although a lot of catastrophic events are covered under your comprehensive auto coverage, but there are some common exclusions like:
War (declared or undeclared)
If you have all-risk insurance, you’re generally covered for accidental losses caused by all perils except those that are specifically excluded. You can take a look at the exclusions in your policy and, if you want coverage for them, work with your agent to get add-on coverages or policies.
If you have a named peril policy, your auto insurance only covers those perils explicitly mentioned and excludes everything else. This can be more challenging to find gaps in your coverage, so you’ll want to work with a licensed agent who can give you the most knowledgeable and experienced advice, like a trusted InsuraMatch agent. Call us today at (844) 300-3364.
11. Intentional damage
Hitting your own car or intentionally causing damage to your own vehicle or someone else’s property is not covered by insurance.
What’s excluded from your auto insurance?
Do you know what’s included and excluded from auto insurance for your policy? Do you have enough auto insurance? If you’re unsure what your coverage looks like, familiarize yourself with the terms of your policy to avoid surprises.
Review what your auto insurance does and doesn’t cover with the help of our expert advisors today at (844) 300-3364!
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