Nowadays, more and more countries are making it mandatory for a vehicle owner to avail of insurance. So, it's more or less understood that all of us have at some point signed some insurance papers. But, how many of us take the time out to read through the terms and conditions? Do we have really have a clear understanding of the instances where you can claim compensations from your insurance agency and when you can't?

If your answer to the previous questions was a hesitant no, then fret not. Here's an article to shed light on what's covered in your car insurance and what isn't.

What does the term exclusions mean in a car insurance policy?

Car insurance exclusions, in simplified terms, are a list of scenarios where you aren't legally allowed to claim compensations for the damages incurred. They are a means for insurance agencies to broadly define what's covered, or rather what's not covered in a policy. These exclusions are generally listed down in your insurance policy, so it's crucial that you go through these documents before signing them.

Is there a difference between exclusions and coverage limits?

Contrary to popular opinion, exclusions aren't the same as coverage limits. As we discussed earlier, exclusions are a list of instances where the insurance agency isn't legally ordained to cover the costs of repairs. On the other hand, a coverage limit is a maximum payout that a policyholder can avail of on an insurance claim. In some cases, the total expenses may exceed the coverage limit, wherein you'll be expected the pay the remaining amount from your own pocket. The only common factor between the two is the fact that they vary from one policy to another, depending on the premium you pay.

What are some of the most common car insurance exclusions?

While these exclusions do change with the policy you choose, some of the most common ones you'll be encountering are:

1) Act-of-god exclusion

This exclusion is said to cover natural disasters like a hurricane, floods, or a landslide. These events generally tend to be unpredictable and most of the standard policies do not protect your precious car against such calamities. So, if you're someone who lives in a part of the world that is particularly prone to such mishaps, it makes sense to pay that extra bit of premium and opt for more comprehensive car insurance.

2) Owned-but-unlisted exclusion

Another type of exclusion is the owned-but-unlisted exclusion where policyholders, like you, withhold details about the number of cars you own in order to avoid having to pay a higher premium. We'll use a hypothetical scenario to explain this exclusion better.

Let's suppose that you sign up for insurance when buying a brand new Honda Civic. But, you choose not to disclose the fact that you also own an older Hyundai Accent since the cost of insurance shoots up with every additional car you add to the policy. So, in case you get into an accident while driving the older Accent, the insurance agency will not pay for the damages incurred by both your car and the one you happened to crash into. So, remember that you might be paying a slightly higher premium by including another car in the original policy, but you avoid having to shell out a fortune in cases of being involved in a fatal crash.

3) Medial payments exclusion

More often than not, an insurance policy will take care of your medical expenses, but there are some exceptions. They include:

  • If you were found to be using your car for business purposes
  • If the mishap occurred while competing in an organized race or while engaging in a harmful stunt display
  • If the accident occurs during the course of your employment and if Worker's Compensation is being provided to you by your employer
  • If you were found to be living in your own car when the said accident occurred

4) Intentional act exclusion

By definition, any insurance policy entitles you to some sort of liability coverage. But, it might be considered to be null and void if the accident under investigation was found to be completely intentional.

Let's say you're cruising along in your Toyota Prius. But, suddenly, you see a family member with whom you had an ugly spat a couple of days ago. So, in a fit of rage, you decide to run him over. In this particular case, the insurance agency may choose not to pay the hospital bills, deeming that the act was purely intentional and could have been avoided by the driver.

5) Excluded driver

This exclusion almost functions like a modification, wherein a policy can be altered to exclude a specific member of the family who might be deemed as a high-risk driver. This individual is the one who tends to have multiple accidents to their name, and their inclusion in the policy can adversely affect the premium you'll have to pay.

In some cases, a family member's name can also be excluded since they no longer happen to drive the vehicle in question. On the flip side, always make it a point to include all the rated drivers in the family, even if they only drive the car occasionally.


So, that was a list of some of the most common exclusions listed down by insurance firms in their policies. The good thing is that some of these exclusions can sometimes be modified according to your needs and demands. But, this is only possible if you first choose to take a look through the terms and conditions mentioned in the papers. Being aware of these stipulations is integral to having a clear understanding of what's covered in your policy and what isn't.