What Do You Mean, Exclusions?

If an individual's auto policy could be counted on to respond to every imaginable loss, it would also have an unimaginable premium. Auto insurance premiums are 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 similar to the following example.

This automobile policy does not provide coverage for 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.

The first instance involves losses that are beyond any insurance company's ability to control and such losses would likely be far beyond the ability of most insurance company's to pay.

The second instance involves losses that are strictly under an individual's control. Insurance companies certainly want to avoid situations where their customers choose to put themselves and their cars in an excessively dangerous position.

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 being in a vehicle that has fewer than four wheels
• occurs while the vehicle is being used to transport persons or property for profit
• happens while the vehicle is in place and being used as a premise or residence
• occurs while on the job, and workers compensation coverage is either available or required for the bodily injury
• happens while an insured is occupying, or is hit by, a vehicle that is owned or is regularly available to an insured, but the vehicle is not listed on the automobile policy.
• occurs while in a vehicle that's being used in an insured's "business." Coverage still applies if the insured is in a private-passenger auto, an owned pickup or van, or a trailer being used with such vehicles.

These limitations are fair. Their purpose is to make sure that coverage which you purchase for your own car, van or truck listed on your policy does not also provide coverage in situations which are better covered by:

• another person's policy
• worker's compensation or a business policy
• specialty coverage (such as racing events coverage)

other types of policies such as mobile home, recreational vehicle, motorcycle or business coverage.

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.