Auto Insurance: Reviewing Liability Exclusions

Liability insurance is the state minimum in regards to auto insurance. It protects you in the event of bodily injury or damage to a third party, paying up to the maximum limit as determined by your policy. The minimum dollar amount required varies from state to state. Additionally, some states require personal liability protection and uninsured coverage as part of the minimum liability package. With liability insurance, as with all insurance, it is important that you know the limitations and exclusions of coverage.

  1. Liability Insurance

    • The greatest disadvantage in liability insurance is found when you are insured for the state minimum and have found yourself in a position where the damage you have caused exceeds these amounts. For this reason, some choose to purchase higher coverage amounts. Your liability coverage may insure every passenger in your vehicle who has been injured in an accident. However, some policies exclude coverage for family members who are not specifically mentioned in the policy while other policies exclude only your spouse. To fill in this gap, some choose to buy additional supplemental insurance such as spousal liability insurance.

    Personal Injury Protection

    • Designed to cover the driver’s medical expenses and lost earnings in the event of an accident, there are some exclusions that make a person ineligible for coverage. These exclusions include intentionally caused injuries, injuries sustained while riding an ATV or motorcycle, injuries while committing a felony, and injury while in a stolen vehicle. In the event you are driving under the influence and have an accident, the insurance company may cover related emergency medical care. However, if you are convicted of driving under the influence or while intoxicated the insurance company can recover the full amount of the medical payments.

    Uninsured Motorist Coverage

    • While not required by all states, uninsured motorists coverage ensures you protection in the event the other party involved in the accident is uninsured, and pays for bodily injury damages. If you live in a state where uninsured motorist coverage is mandatory, it is important to know that the coverage may be exclusive to your state. To have this coverage extended to other states, you have to purchase coverage for an additional fee. If your basic liability does not include uninsured motorist coverage, you can purchase supplemental uninsured motorist coverage with a benefit amount that does not exceed your liability benefit maximum.

    Other Exclusions

    • Be sure to review your policy terms for coverage exclusions based on who is driving your car or where your car is being driven, such as driving outside of the United States or offroading. Insurance policies generally do not cover damage you intentionally cause. Another obvious exclusion when insuring your car with only basic liability is the fact that you will not have guaranteed coverage for the repairs of your own car, as this is provided under collision insurance. If the other driver is at fault, then you can claim damage to your car through that person's liability insurance.

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