The Savvy Insurance Shopper's Guide to Understanding Exclusions - Private Management Insurance Agency

The Savvy Insurance Shopper’s Guide to Understanding Exclusions

An exclusion is a typical part of any insurance policy. Simply put, exclusions are exceptions to policy coverage. Although you may have what seems like an excellent insurance policy with ample coverage, you should take another look. The number and type of exclusions could still leave you paying out of pocket.

Exclusions are rarely evident from the outset. Insurance policies use language that is often difficult to read, frustrating to understand and long enough that many customers don’t bother reading every line.

Unfortunately, the only way to know exactly what exclusions exist in your policy is to read through it. Look for the exclusions and don’t be afraid to ask your broker about everything, no matter how long it takes. 

Homeowner’s Exclusions

Homeowners can expect to see exclusions that pertain to what is commonly referred to as “Acts of God.” No, this isn’t an exclusion based on religion. This simply means damage that occurs to a home due to nature rather than human intervention.

Some “Acts of God” are typically covered, like hail storms or tornadoes. Others are not. Areas that are prone to hurricanes or earthquakes are likely to have exclusions in the policy. Even those natural disasters that are covered might have a separate deductible or lower coverage.

If it is important to you to be covered for wind or water damage, you need to fully understand what your responsibility would be and how much your policy covers in case of catastrophe. Ask your broker to break it down for you in plain language, complete with dollar figures. You then have the opportunity to ask for quotes on policies that have better coverage. Conversely, you can buy supplemental insurance that covers those areas where your chosen policy is lacking.

Auto Insurance Exclusions

There are typically more exclusions on automobile insurance than on homeowner’s policies. The most common exclusions pertain to vehicle ownership. You may be excluded if your are driving a rental or a borrowed automobile. Rental insurance may be appropriate if your own policy has this exclusion.

Exclusions may be in place if you are driving a vehicle that owned by someone in your home and you haven’t been explicitly included on the policy. A simple way to avoid this is to include all adult drivers in your household on every insurance policy.

Vehicles used for business purposes often fall under exclusions. If you own a business or drive for a transportation company like Lyft or Uber, you will need a separate policy that is for business only. Using your vehicle for businesses purposes while working for someone else is often part of an exclusion as well. Prior to using your car for work, make sure you are covered under your employer’s policy.

Other common exclusions pertain to criminal activity. Your insurance policy likely has an exclusion that states valuables that are stolen from a vehicle will not be covered if forced entry cannot be proven. As long as you always lock your car and keep valuables hidden from sight, you should be able to avoid worrying about this exclusion. Conversely, if you are not the victim but are the perpetrator of a crime and you are involved in an accident, exclusions will protect the insurance company from having to give you a settlement.

Private Management Insurance Agency is highly willing to offer whatever assistance you may need at each step of the quoting and transaction process. You can reach our customer service team on Monday through Friday from 9 am-5 pm PST— Call us at (858) 252-4111, or you can also set a schedule with us just by clicking here:

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