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Auto Insurance Exclusions and Limitations

Auto insurance exclusions and limitations are present in every auto policy. In a narrow sense, they are explicit, listed out in the actual language of the policy. But in a larger sense, there are limits that are only implied. All auto insurance coverage plans are subject to limitations and exclusions as defined in the language of these plans. There are many examples of these limits. Other types of limitations are those present due to the choices we make as consumers in planning our and putting together our policies. Auto insurance exclusions and limitations frame in the coverage we get for the money we spend on our car coverage.

Explicit Auto Insurance Limits

In every auto insurance policy, there are many limits expressly mentioned. These limitations of protection are stated in the language of the policy to avoid confusion or conflict later on. Most of these limits are placed to avoid putting undue strain on the carrier. They cannot afford to take care of every little thing that might go wrong with our cars, or we would never be able to afford our premiums if they did.

One example of a binding limit on auto insurance protection is wear and tear. Normal wear and tear on a vehicle is not covered by your policy. If your old truck starts to have a problem with the hinge on its front passenger door, it is up to you to get it taken care of at your own expense. Now, if this problem was caused by a collision or some covered comprehensive claim such as a truck break in, the damage repair work would be covered, although you would still have to pay a deductible. This factor might make a smaller repair claim such as this one superfluous anyway. But this example just serves to demonstrate the difference between something you can claim and something that is not covered. Normal wear and tear on your car, truck, or SUV is not covered and is your responsibility to address.

Mechanical breakdown or parts failure are also not included in your auto insurance policy. With that being said, it is important to point out that these sorts of items often are included in the warranties that come with cars purchased from dealerships. For example, a transmission requiring a rebuild or replacement would not be covered under a car policy unless the transmission was damaged in a car accident or other legitimate auto claim. If the problem is mechanical, the responsibility is yours. Your warranty may cover this type of work if it is still in effect when the problem arises. It pays to take a look at the terms of your warranty when you have mechanical or parts breakdown issues. But do not expect a car policy to take care of these sorts of concerns.

Aftermarket parts and equipment are usually not covered in an auto insurance plan unless there is specific additional coverage provided for them. For example, a non factory installed stereo system stolen out of your car would not be covered unless you had an existing endorsement on your policy insuring it. The extra coverage you can get on these types of aftermarket parts often come with their own limits and deductibles, essentially acting as their own separate policies.

Any damage caused intentionally or maliciously by the covered policy holder will not be covered by an auto plan. In fact, trying to make a claim on damage you caused on purpose can get you in a lot of trouble on top of earning a denial of your claim. You could end up being hit with charges of insurance fraud for coming up with what amounts to the filing of a fraudulent claim. Given that these types of claims are not permitted, it is better not to try it for fear of getting into trouble. The odds of getting away with it are not good anyway.

Pay Attention to Your Policy

If you are in a position where you need to file a claim or you are wondering whether you can given the circumstances of your situation, there is a lot of information available on your policy itself that can often answer your questions for you before you even make a phone call to your insurer. For example, there is usually a definition section of every policy. This section gives definitions for the terms used in the policy to give you a better idea of what they mean in context of the coverage you are buying.

For example, you can take a look at this definition section and find out the connotative definition for "covered auto." You can find out who is covered in your policy. Maybe someone else used you car and got into a claim situation and you are trying to figure out how to proceed. Consult your policy before you go any further. You may find you have solid ground to stand on. If you do, you can proceed armed with this knowledge and do not back down from an argument with an adjuster.

We know that in almost all cases drivers using your vehicle without permission are not covered under the terms of an auto insurance policy. But there may be specific limits on who is allowed to drive your car even with your permission. Make sure you understand these limits before proceeding with any claim. Better yet, reads the whole policy over and get to know these types of limits before you buy into a policy in the first place. If you are inclined to lend your car out to people, you need a plan that will allow you to do so without punishment.

Other Types of Auto Exclusions

There are other ways you may be excluded from insurance coverage in certain situations. One of them is if the general terms of the contract are not being met. Take a look at the conditions of your contract and be sure you understand what they are portraying. If either the insured or the carrier (or both) fail to abide by these terms, all coverage may be void. You have to be careful to avoid this. Otherwise you might be throwing money away, only to find that it has bought you nothing when it comes time to file a claim.

Another indirect limit, of course, is created by the types of coverage you choose to include or exclude on your auto policy. For example, leaving out collision insurance means you will not have coverage against the risk of damage to your car in the event of an accident. The same types of limits are placed on your policies when you choose to forgo any area of coverage. Uninsured motorist protection only covers you if you actually pay for it. If you decline this part of a policy and are victimized by a hit and run or an uninsured driver, you will be out of luck and your premium will have been largely wasted. Keep this in mind when you're thinking about the short term savings you net from auto insurance exclusions and limitations. The long term costs may end up canceling out those savings and then some.


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