Beware exclusion clauses

One of the ways we deal with the uncertainties of life is to assume none of the bad stuff will happen to us. This is reassuring until it's put to the test. Then we can find we've run out of luck and the bad stuff is happening to us. So, when it comes to insurance, it's as well to know where potholes are and how to drive safely round them. That way, you can assume none of the bad stuff will happen to you and be right!

Let's start with the simple rule. You have to accept the insurers are in business to make a profit. That means they will put terms into the policy to limit or exclude their liability. If insurers gave you a blank check and said they would pay for all your losses, no matter how they were caused, they would be throwing gas over their business and driving it into a burning building. So before you buy a policy, make sure you understand exactly what cover is on offer and what specific situations are excluded. If may be you can't afford anything better, but you should at least know how to protect yourself.

One of the standard exclusions is for intentional damage. Notice this is not "intended" damage. This is not you taking a baseball bat to the bodywork. It's damage caused by anything you do or fail to do where there's an element of intention. Take those road rage situations as an example. Another driver rubs you up the wrong way and you get competitive. Perhaps you tailgate and flash your lights. If it goes a tad too far and there's contact between the two vehicles, you cannot claim.

Your driving was intentional. You did not have to drive so close. The fact you thought there would be no damage is no defense. You have to take responsibility for your actions and pay for all the damage resulting.
Then there are the exceptions that deal with "livery". There's no problem if you occasionally give a ride to other people or move their property around. But if this gets to be a regular thing or you start taking money to cover the cost of the gas, your policies all lapse. Even though you are not running a business, the exceptions cover any voluntary use of your vehicle to benefit others. Look honestly at what you do. If anyone would think your use was starting to look more professional, you should buy a commercial policy. For the record, most policies cover car pools, but even this is not guaranteed if you take money to cover your costs.

Lawyers are paid a lot of money to draft contracts. They think carefully through all the possibilities and rule out any where you might take unfair advantage of the insurer. The intentional and livery exceptions are just two of the standard terms. So, when the auto insurance quotes come in, they are just a start, giving you the headline price and the option to read through the policy. Always read through the policies before you buy. If you know some things are excluded, you can take care and avoid ever falling foul of these rules. Cheap auto insurance is a game to offer the least possible cover for the lowest possible price. Learn the game before you play!