Auto insurance

4 times your car insurance will not cover you

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Don’t assume that auto insurance always provides coverage, as this could lead to big financial losses.


Key points

  • Auto insurance can cover losses in many different circumstances.
  • However, not all incidents are covered by car insurance.
  • Drivers may not be covered in four key situations, including normal wear and tear.

Auto insurance can provide coverage for an insured’s vehicle as well as for any damage the insured causes to other motorists.

Depending on the types of auto insurance a driver purchases, they can pay for everything from a driver-caused collision to a tree falling on their car.

But while it’s possible to set up protection for most types of losses, there are some situations where car insurance typically won’t provide coverage. Here are four.

1. Using your car for business purposes

Auto insurers generally exclude coverage for business use of a personal vehicle, unless the driver has purchased optional additional coverages.

Therefore, if a motorist does not tell their car insurance that they are using their car for business purposes, they could be denied coverage for any claims that arise. This can include people who use their car to deliver food or who work for a ride-sharing service.

To avoid being denied insurance coverage if damage occurs to a car used to provide business services, always tell an insurer when and if a car will be used for business. After making this disclosure, motorists should add the coverage they need to have the business use of a car protected before hitting the road.

2. Normal vehicle wear

Auto insurance can cover damage caused by accidents or other specified incidents such as vandalism, animal encounter, hailstorm or falling trees. Collision and comprehensive coverage provides these types of protections for a policyholder’s own vehicle, and drivers need to read the fine print to see exactly what their insurance will and won’t pay.

Car insurance, however, does not cover normal wear and tear. If a motorist needs new tires because they are worn out or because they run over a nail, car insurance will generally not pay for the costs incurred as a result of these routine problems. Likewise, if the brakes wear out or if the interior of the car is damaged due to dirt, car insurance will not offer any assistance to the motorist to pay for repairs.

3. Intentional damage

If a driver intentionally causes damage to his own car, an insurance company will not pay for it.

For example, a driver who owes more on his car than it’s worth and sets it on fire won’t get his insurance to pay for his losses – and he could end up facing a number of criminal charges for car fraud. insurance and other violations in these circumstances.

4. Illegal acts

Finally, the insurance may exclude coverage for damages caused by illegal acts. If a policyholder races their car illegally, for example, the auto insurer will likely refuse to cover any damage to the driver’s vehicle as a result of the drag race.

Being denied coverage for serious vehicle damage can be financially devastating, so it’s important that drivers understand exactly what their car insurance will and won’t cover. This can reduce the risk of unpaid losses and can help motorists plan for coverage of costs they are responsible for in relation to their own vehicle.