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What Do you Mean, Exclusions?
Some
Things Still Aren't Covered
Having
an auto insurance policy is a good thing. It shows that you're
a responsible driver and it likely fulfills your state's requirements
concerning the legality of your sharing the road with other
drivers.
However, even if you have auto insurance, there are a number
of instances where your automobile policy won't provide coverage.
Such instances are called EXCLUSIONS. Why should exclusions
exist in an insurance contract? Actually there are quite a
few different reasons. Some fundamental reasons are that exclusions:
- help
maintain the expense of providing insurance;
- prevent
coverage under one policy when it should be covered elsewhere;
and
- prohibit
coverage for losses that are against public policy.
Let's
look at these reasons a bit more closely and provide some
examples.
Help
maintain the expense of providing insurance:
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.
Insurance
would quickly be impossible to buy if policies were expected
to pay for injuries to car thieves or people who fake accidents
and injuries.
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 your insurance agent.
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Martinson
Insurance
518 Hawthorne Street • PO Box 8
Alexandria, MN 56308
Phone: 320-763-6518
Toll Free: 800-757-6518
Fax: 320-763-5546
E-mail: agency@martinsoninsurance.com
Web: www.martinsoninsurance.com
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