Car insurance exclusions

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All car insurance policies include a list of exclusions, but what are exclusions in insurance? Insurance exclusions are a list of things that are specifically not covered by that policy. It is common for policies to have different exclusions depending on the policy type and coverage level. Still, there are some industry-wide exclusions you can expect. In either case, it’s vital to know what a policy will and won’t cover before you purchase it. When shopping around for car insurance and comparing quotes, it may help to compare exclusions to ensure you get the coverage you want.

Why are car insurance exclusions important?

Imagine filing a claim only to find out that what you’re filing on is not covered in your auto policy. While not idealistic, it is an all too plausible scenario for people who have not checked their insurance exclusions. Having a claim denied is less likely when you understand the policy and its nuances.

For instance, basic liability insurance will only pay towards the costs of others that you are liable for. This type of coverage excludes your own medical and property expenses. Knowing what your car insurance policy covers is essential to getting the coverage you need. Otherwise, you could spend months paying for a policy only to find out that it doesn’t cover what you expected it to when you need it the most.

Coverage-based exclusions

Exclusions in insurance often relate to different types of coverage. These exclusions can be specific to the coverage type and help define what those policies are best for. The nuances and restrictions on policies are one reason why some drivers maintain multiple kinds of coverages for their vehicles. Even the best car insurance company will only pay out on what the policy covers.

Liability insurance exclusions

Liability insurance covers the expenses of another driver whose costs you are responsible for. Suppose you are at fault for an accident. In that case, your liability coverage will help cover your financial obligation to the drivers, passengers and properties you injured or damaged outside of your vehicle. However, this type of coverage will not pay towards your injury or property damage costs, which are exclusions.

MedPay insurance exclusions

This coverage type will only pay towards medical bills and not repairs or replacements to property, including vehicles. Imagine you are in an accident that totals your car and causes you some injuries. In that case, a medical payments policy would help with your medical bills regardless of fault, but not with replacing your vehicle.

Collision and comprehensive insurance exclusions

Comprehensive and collision complement each other partly because each excludes much of what the other covers. Collision covers damage caused by accidents, whether with another vehicle, a tree or other objects, but excludes most non-collision damage. Comprehensive covers damages from falling objects, vandalism and more, excluding damages caused by a collision. If you are at fault for an accident that damages your vehicle, collision coverage can help pay for your repair costs. If your car has a tree limb fall on it while parked, comprehensive coverage can help pay for the repairs.

Driver-based exclusions

In general, auto policies follow the vehicle, meaning that if you give another person permission to drive your car, your car insurance will generally remain in effect and cover them. However, there are nuances and it is possible to have specific people excluded from your policy. There are a few different reasons to do this, but one of the most common is to lower the cost of premiums by excluding a high-risk driver that lives with you. This driver may be a teen, roommate or even a spouse. However, not all states permit you to name excluded drivers.

Family member exclusion

Some policies make exclusions for claims involving two members of the same family or household. For example, if you were to get into an accident with an insured from your household and they were deemed at fault, you may be barred from pursuing legal action or obtaining an insurance payout.

Named driver exclusion

The most common way to use driver exclusions may be to name the driver and have them listed under the policy’s exclusions section. This method is generally the simplest because the insurance policy will not cover that specific person. Named exclusions can help keep premiums lower when you have a high-risk driver who would otherwise have access to your vehicle due to circumstances like sharing a home with them.

Damage-based exclusions

Depending on how an auto accident occurs, some policies may exclude the damage. For instance, comprehensive coverage will not cover collisions, and collision insurance will not cover vandalism. Many forms of coverage have a specific focus on what types and causes of damage they will cover, with all others excluded.

Catastrophe exclusion

Natural disasters are often excluded from many types of auto insurance policies. It varies between companies and policies, but catastrophes like floods, earthquakes, wars and civil unrest could be excluded from coverage. However, many such disasters are included in comprehensive auto insurance policies.

Intentional act exclusion

Insurance companies cover accidents and are not bound to pay out if the damage is intentionally caused by the person who holds the insurance policy. For example, if a driver deliberately strikes someone with their vehicle, their insurer likely won’t pay for injury expenses claimed in the documentation.

Other car insurance exclusions

Many things are excluded in insurance policies, although it varies between plans, companies and circumstances. Thankfully, specific policies and coverage types can help cover many types of exclusions.

  • Personal property exclusion: Personal property is excluded from many types of auto insurance. Some policies will cover the vehicle, but not the personal items within it.
  • Business vehicles exclusion: Business vehicles are often driven more than non-business vehicles and represent a greater financial risk for insurers. The differences in use is one reason that some policies exclude coverage of a personal vehicle while it is being used for business. In this case, commercial auto insurance may be needed.
  • Out-of-country travel exclusions: In general, auto insurance policies purchased in the U.S. are only good within the states. However, depending on the company, you may be able to add temporary coverage for cases where you drive outside the country, like to Mexico.

Common car insurance endorsements

Also known as policy riders, car insurance endorsements modify your plan in specific ways. Many of these endorsements can help compensate for exclusions and alter your policy so that it provides coverage more in line with your needs.

  • Rideshare insurance: This coverage is designed for drivers who use their own vehicles for a rideshare business like Lyft or Uber. These plans blend commercial insurance with personal, providing greater coverage for passengers and personal properties than a basic liability policy.
  • Gap insurance: Gap insurance helps you pay off the value of your vehicle if it is totaled. Many policies will only pay out based on the current value of a car instead of its original value. Gap insurance fills in the gap that the vehicle’s depreciation causes over the years you have had it.
  • Roadside assistance: Generally one of the less expensive riders, roadside assistance provides coverage for emergency services, like having your car towed if it breaks down. These riders can also include essential roadside services like tire changes.
Written by
Joshua Cox-Steib
Joshua Cox-Steib has two years of experience in writing for insurance domains such as Bankrate.com, Coverage.com, Thesimpledollar.com, Reviews.com, and more. His work has also been featured on such sites as Msn.com and BBB.org. His insurance writing career has spanned across multiple product lines, with a primary focus on auto insurance, life insurance, and home insurance.
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