What Does Car Insurance Not Cover?

Exclusions in a car insurance often proves to be a complex subject for car owners and the lack of knowledge about what their car insurance doesn’t cover leaves them in a lurch. Indeed, exclusions is a tricky matter to understand and comprehend. Third-party motor insurance before buying it.

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Let us take an example to understand the exclusions in a car insurance better.

Aditya purchased a Honda City car one year back and also invested in a suitable car insurance to go with it. However, the car suffered some damages owing to a minor road accident when his wife, Shalini, was driving.

Surprisingly enough, when Aditya went to make a claim for the repair charges, the insurer informed him that his car insurance does not cover damages caused when someone else is driving the car. This part of the policy was unknown to him and Aditya had to shell out the entire repair cost from his own pocket.

This example brings into light an important aspect of car insurance, the tricky areas which your insurer would typically leave out from their coverage and common exclusions in car insurance. Buying a car comes with its share of additional responsibilities and expenses.

Protecting your big-ticket purchase is one of your priorities and it is equally important that you gain more insight into the intricacies of the policy you are buying.

List of a Few Things that Aren’t Covered In Car Insurance

Your Car Insurance Doesn’t Cover Damages Caused Due To Natural Calamities

Although your car insurance covers collisions and accidents, if any damage occurs to your car due to a natural calamity, like an earthquake, tornedo or damage from floods, you will not be eligible to receive any compensation for it. Typically, insurance companies place natural disaster like floods, earthquakes under the ‘Acts of God’ clause which fall under permanent exclusions in car insurance. Do read the terms and conditions to see if this area of natural disasters is covered by your policy provider.

Your Personal Belongings

In case your car is vandalized or broken, your insurer will pay for the damages caused to your car, but it will not pay for any theft or damage caused to your personal belongings kept in the car, like your laptop, phone or other valuables.

To keep your belongings safe, make sure you keep them tucked out of sight. If you have home insurance, then the loss of your phone or laptop will be covered under it. Also, your car accessories, like the music system, navigation system, TV’s, custom seats, etc. do not fall under the insurance coverage.

Read More: What Does Your Car Insurance Covers?

In Case of Theft, Make Sure You File a Police Complaint

Despite car insurance largely covering theft of cars, you must make sure that you file a police report when your car is stolen, to seek adequate compensation. Also, in case your car was stolen owing to your own carelessness, like leaving your key in the car, not locking your car securely or entrusting other people with it, your claim might be rejected by your insurer on the grounds of carelessness. So exercise extreme caution with the safety and maintenance of your car to avoid incidental exclusions in your car insurance.

Usage of Your Car for Business Purposes

Your insurer will not provide coverage for the commercial use of your vehicle and damage caused to it when used for business purposes. If your car is being used to transport anything related to your business and it faces a collision, you cannot make a claim, unless your policy covers commercial vehicles. This area is known as ‘Business Use’ coverage and is usually not covered in car insurance for individuals.

No Coverage When You are Using Someone Else’s Car and Vice-Versa

As explained in the example in this article, if you are driving someone else’s car or the car is rented, and it meets with a collision or accident, the claim for the damages will be rejected. The insurer will only pay for claims that have been made for the car registered under the policy holder’s name. Similarly, if your spouse drives your car and meets with an accident, the insurer will reject the claim on the same grounds.

It is always advisable that you are well aware of the nitty-gritties associated with the insurance. There might be tricky exceptions in car insurance that do not meet the eye initially.

Written By: PolicyBazaar - Updated: 09 November 2021
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