Six Auto Insurance Potholes (1-3)

Are you in good hands with Allstate and is State Farm is there for you? Most auto insurance policies leave plenty of room to deny coverage and stick you with the bill. That's by design, of course.

If auto insurers to offer blanket coverage for every blunder made behind the wheel, their business would quickly swerve off the road and into a pothole. "A policy that covers anything that is imaginable without any exclusions would be impossible to price and equally difficult to afford", according to the Insurance Information Institute.

Instead, auto insurers offer us a contract that assumes most of the risk in exchange for a commitment on our part to act responsibly. "For some of these exposures, there is some responsibility placed on the individual, and that's where these exclusions come in," says the Insurance Information Institute.

The following information lists six major potholes that may exist in your auto policy. Because policies vary widely, be sure to check with your agent if you have questions about your coverage.

Auto Insurance companies have written "Potholes" into their policys that are hard to find. There could be "potholes" in your insurance coverage. Be aware that most policy form and endorsements are only mailed to you in print on the original policy when you signed up with the insurance company. The Pothole Crusader wants you to know the details.

When you get your new policy declarations every year or six months the details are not listed, only references to a policy form or endorsement, no details!!!

It is very important for you to understand what coverages are excluded or included. Its all in the fine print on the original policy and endorsements you could have gotten years ago. If you never took the time to read what coverage is excluded or included in the fine print you will be in for a big surprise.

Potential Auto Insurance Potholes 1-3

(1) You may have witnessed road rage on the highway when intentional or accidental automotive slights set off "Mad Max"-like reactions and retaliation.What those furious motorists may not realize is that blowing your top can void your auto insurance coverage should push come to not-so-gentle bumper nudge.

Auto policies typically exclude liability coverage for a driver who intentionally injures someone or causes damage to their vehicle or other property. "It there is any intent, it's excluded," says Mitch Wilson of the Ohio Insurance Institute. "That's to prevent those instances where someone wants to take out a policy because they're tired of dealing with their neighbor."

(2) Livery is a creaky old Shakespearean term for the carriage trade or the voluntary transfer of people or property from one place to another, as in delivery.

The problem with using your personal vehicle on a regular basis for livery is that it multiplies the risk to your auto insurer. That's why most personal auto policies exclude all coverage -- liability, medical and collision -- if you routinely use your vehicle to transportpeople or property.

"It doesn't even have to be a business; if you donate your time, coverage still would not apply,". (If you deliver Meals On Wheels for instance, check with your agent and see if your policy has a "Livery Converyance"  in your policy. If it does it means you are excluded from all coverage-libiality, medical and collision if you routinely use your vechicle to transport people or property.)

This exclusion means that you can void your coverage by simply delivering pizzas in your vehicle, let alone charging a fee for driving people around.

The physical damage coverage (collision and comprehensive) portion of a car insurance policy also usually states that using your vehicle for livery or delivery purposes is excluded.

If you keep your personal car insurance policy and launch your tour business, your car insurance company could easily deny claims if there is an accident.  The denial would be due to the use of your vehicle -- transportation of people for payment – not being covered under your policy. And your whole policy could be canceled for misrepresentation of the use of your vehicle.

The livery exclusion doesn't apply to your commute, nor is it intended to punish car pools or the office worker who makes the occasional office lunch run. But if you're doing the livery life on a regular basis, it's best to buy a commercial auto policy designed to carry that extra risk load.

"How your vehicle is used defines the kind of policy you require,".

(3) Most of us have borrowed a friend's car or loaned one without thinking about what would happen in the event of a collision. The Pothole Crusader wants you to know that it's all spelled out in your insurance policy -- with plenty of room to deny coverage.

In most insurance policies, coverage goes with the car, but most of them will have an exclusion if there is a loss to any non owned auto. So you wouldn't be covered unless the car's owner had coverage and you were entitled to use their vehicle.

If you borrow a car and the owner doesn't carry collision or their coverage is insufficient to cover the damage you cause while driving their the other party may go after you for the difference.

Likewise, if you loan your car to a friend, your policy may: a) cover them, b) not cover them, c) cover them only if you're riding along with them or d) limit their coverage. That's something to consider about before you toss your buddy your keys according to the Insurance Information Institute.

Auto Insurance Potholes 4-6

Filing Pothole Claims  (A how To Guide From The Pothole Crusader.) Remember this is not legal advice but only Pothole Crusader advice. If your not sure how to proceed get legal advice from a professional.

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