- help contain the expense of providing insurance;
- prevent coverage under one type of policy that should be covered; and
- prohibit coverage for losses that are against public policy.
Help Contain the Expense of Providing Insurance
If your auto policy had to cover every imaginable loss, it would have an unimaginable premium. Auto insurance is affordable only if insurance companies can exert some control over the losses their policies can be expected to cover. Therefore, automobile policies generally contain exclusions against accidents which involve:
- Injuries caused directly or indirectly by a nuclear weapon, reaction radiation or contamination; or by war, civil war, insurrection, rebellion or revolution.
- Injuries involving any vehicle inside a facility designed for racing while preparing for, or competing in, a race.
Prevent Coverage under One Policy When It Should Be Covered Elsewhere
Most automobile policies won't provide coverage for a loss or injury which:
- happens while in a vehicle that has fewer than four wheels
- occurs while the vehicle is transporting persons or property for profit
- happens while the vehicle is being used as a residence
- occurs while on the job and workers compensation coverage is either available or required for the bodily injury
- takes place while an insured making use of a vehicle he owns or has regular access but the vehicle is not listed on the automobile policy.
- involves a vehicle that's being used in an insured's "business."
Prohibit Coverage for Losses That Are Against Public Policy
Some examples of this reason are when coverage is denied for losses:
- occurring when the injured person is occupying a vehicle knowing that she or he does not have the vehicle owner's permission
- that were fraudulently staged by the vehicle's owner in order to collect insurance for "phantom" injuries.
- that were deliberately caused by the vehicle operator
So remember, without reasonable exclusions, you or I would not be able to enjoy the protection and security that is offered by automobile insurance. If you have questions about exactly what is excluded by your policy, talk to one of our insurance agents.