Auto insurance policies are designed to protect vehicle owners from financial loss due to an accident or claim. Without auto insurance, we would be forced to pay out of pocket and would have a hard time recovering costs if someone else was to blame for an accident. Auto insurance can cover just the basic liability coverage, which includes damage to a third party’s vehicle or property and injuries, or it can cover a multitude of additional and optional coverage. Some of these coverages include collision, which covers damage to your vehicle due to a collision or upset; comprehensive, which covers damage to your vehicle from fire, theft, vandalism, and animal collision; or under/uninsured motorist coverage, which covers expenses if you are involved in an accident with a driver who doesn’t carry adequate insurance.
Auto insurance policies also list exclusions; these are events or coverage that they will not pay for in the event of a claim. Following are three common auto insurance exclusions.
Named Driver Exclusion: In many cases, there is more than one driver living in a household. You are required to list every driver on the policy. Not every driver may have a good driving record and this can cause your premiums to skyrocket. One solution is to exclude a driver from your policy. This will help to lower your insurance premiums, but keep in mind that if this excluded driver happens to drive your vehicle and you file a claim, your insurance company may not pay for certain coverage.
Hail Damage: If you add comprehensive coverage to your insurance policy, you are covered for damages to your vehicle caused by events or acts other than a collision. This includes theft or attempted theft, animal collision, fire, or hail. However, if your vehicle sustained hail damage in the past, your insurance company will add this auto insurance exclusion onto your policy. This means that any existing damage will not be covered. If you do get the damage fixed, you can bring the invoice from the repair shop to your agent and they will remove the exclusion.
Glass Coverage: This specifically applies to the windshield. It is usually more beneficial for you to replace your windshield yourself rather than paying the deductible and possible premium increase. This may also be added if your windshield has existing damage to it. Again, if you have it replaced, you can notify your insurance company and they will remove the exclusion.
Always review your auto insurance policy with your insurance agent so that you are aware of all coverage, limitations, amounts, deductibles, and auto insurance exclusions. This way, you will not run into any surprises should you need to file a claim.