There is no need to worry when you are in good hands and when you have insured with some of the major auto insurance companies. However, one must understand that there are some inherent loopholes in most auto insurance policies and there are many ways in which auto insurance companies can reject claims and hand you a bill. This is by design and that’s for sure. If auto insurance companies had to offer blanket coverage for all the mistakes we make when we are behind the wheel, they would have gone out of business quickly.
There is no policy that covers just about anything and everything. This would be an impossible proposition as this will end up being prohibitively expensive and unaffordable for most people, stated Lynne McChristian, Insurance Information Institute.
Instead, what we are offered is a contract with the insurers where they assume a majority of the risks and we give a commitment of being responsible motorists.
McChristian states that due to these exposures, some amount of responsibility is placed on the policyholder and this is where the exclusions kick in.
Policies vary widely from one insurance provider to another and it is best to check with the company or the agent before purchasing one. But these are the general potholes that might exist in your policy and it is better to have a look at the checklist.
- Intentional damage – Road rage is a common thing and most of us have witnessed it especially on the highways, where a minor incident can result in a ‘mad max’ kind of reaction with some retaliation as well. Losing your cool can easily void your insurance cover.
- Livery exclusion – When you transport people on your personal vehicle on a fairly regular basis for livery then your auto insurer is at risk. This is not to punish those who carpool or just offer a colleague a lift, but for those individuals who live the livery life regularly. In such cases it is best to buy a commercial policy.
- Lending or borrowing a car – Non-owned auto is excluded from any coverage. So think twice before borrowing your friend’s car.
- Totaled car – When a car is totaled, the market value of the car at the time of crash will be used to calculate the payout.
- Theft – Most holiday shoppers will realize that the booty that is stored in the vehicle will not carry coverage and hence the onus lies on you to protect your valuables.