Homer Smith Insurance Blog

In the insurance world, an “exclusion” is a provision within an insurance policy that eliminates coverage for an act, a person, a type of property, or a type of damage or location.  You buy auto insurance specifically to insure your property, why should there be exclusions in your insurance policy?  The short answer is yes - exclusions are used by insurance companies to avoid paying for things the policy, and the policy rates, were not designed to cover.  Exclusions help contain the expense of providing insurance.  They also prevent paying for things that should have been covered under a different policy, or prohibit coverage for circumstances that are against public policy.  Specific exclusion may be added at your request, or they may be a general part of your policy. 

For your own financial interests as a policyholder, you may want to exclude ask your insurer to write an exclusion for a particular driver or class of drivers – say your lead-footed teenagers who have accumulated a couple of speeding tickets.  This can lower your premium and leaves you with the responsibility to keep them out of your car.

Your insurer will add some exclusions because they cannot make reasonable judgments about the losses a policy can be expected to cover. For example, automobile policies generally contain exclusions against accidents involving:

* 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.

In the case of war and general civil upheaval, it is easy to predict that the situation on the roads is going to change.  In the first case, the insurer does not want to pay for the chaos – and you do not want to pay the premium they would charge.  In the second case the potential for loss involves the driver’s choices.  Insurance companies would prefer to avoid situations where their customers deliberately put themselves and their cars in danger. 

Other exclusions may be added to protect the insurer against providing coverage for losses that should have been covered under a different policy.  Typically, these limitations and exclusions are fair. If you use your personal vehicle as a taxi service and charge customers for transportation, you need a commercial insurance coverage.  Your insurer will provide such coverage, but wants to make certain the underwriting and the rates are appropriate.  Coverage that you buy for your own car, van, SUV, hybrid or truck listed on your policy should not be expected to handle situations that should be addressed by either another person's auto policy, a worker's compensation, a business policy, by a specialty policy (such as racing events coverage) or other types of coverage.

Finally, there are a few exclusions that may protect the public interest, such as when a person is injured while driving a vehicle without the owner's permission or in an accident deliberately or fraudulently caused by the vehicle owner or operator.  As a consumer, you definitely don’t need to be absorbing the costs associated with injuries to car thieves, to people who fake accidents and injuries or to persons who intended to injure another person or damage property.

So, without reasonable exclusions, the average consumer would not be able to afford the protection and security offered by automobile insurance. All insurance policies have exclusions and limitations, and the wise consumer consults with their Washington Auto Insurance agent and reviews their policy to make sure they have the coverage they need.