ExclusionsYou may not collect benefits under this section of our fault-based policy if any of these conditions exist.
This policy does not apply:
(1) to damage caused intentionally by you or any other person using your insured car with your permission
(2) to a non-owned car arising out of its use by you or a relative while employed or otherwise engaged in the automobile business;
(3) to tire wear;
(4) to damage caused by diminution in value of your insured car or any part of it, or equipment permanently attached to it, by reason of a loss otherwise covered by this policy. |
Explanations
Exclusion (1) is pretty self-explanatory. If it was done on purpose, forget about coverage.
If you work in the automobile business, such an automotive repair shop, or a car dealership, and a vehicle that is not yours is damaged when you were using it at work, according to exclusion (2), there is no coverage under our sample fault based policy.
Exclusion (3) is self-explanatory, but note that wear and tear to parts of the vehicle other than the tires are covered under the policy in this Part. (See “Understanding Your Fault Based Auto Liability Policy –All Risks Physical Damage--What Your Insurer Will Pay For: Agreement and Additional Payments”)
Exclusion (4) says that if a loss occurs that decreases the value of your car or any permanently attached equipment, you are out of luck in terms of coverage. For example, if your car is vandalized and your $2,000 custom paint job is ruined, decreasing the value of the vehicle for resale, you’re on your own.
Limits of Liability
The limits of liability, that is, the maximum your insurance company promises to pay for your All Risks Physical Damage claim, is provided in the following wording:
Our limit of liability for loss shall not exceed:
(1) the lesser of:
(a) the actual cash value of the stolen or damaged property; or
(b) the amount necessary to repair or replace the property with similar kind and quality;
(2) $500 for a utility trailer not owned by you or a relative;
(3) $50 for theft from your insured car of tapes or compact discs designed for use with sound equipment permanently installed in your insured car. Our liability for loss involving mechanical breakdown or wear and tear to your insured car shall be reduced by 1% per 1,000 miles over and above the original 50,000 miles recorded on your insured car’s odometer. |
Explanation
This is fairly self-explanatory. However, note that a loss concerning a mechanical breakdown or wear and tear to your car is reduced depending on how many miles you have driven beyond the original 50,000. If, for example, your brakes wear out at 80,000 miles, and it will cost $500 to replace them, you will only be able to recoup about $350 less your deductible.
Overlapping Insurance Policies (Other Insurance)
If you have more than one policy covering your loss, this is the section of our fault-based sample policy which addresses the issue. As with most coverage, there is no double dipping.
If there is other insurance also covering a loss covered under this Part, we shall not be liable for a greater proportion of such loss than the limit of liability of this policy bears to the total limits of liability of such other insurance except:
(1) any insurance afforded under this Part for a car you do not own is excess over any other insurance;
(2) the insurance afforded by this policy to a newly acquired car does not apply to any loss against which you have other insurance.
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Explanation
If you have another policy, this fault-based policy will cover a proportionate amount of your damages. If, however, you are driving your friend’s car, and the other insurance is your friend’s policy on his car, his policy covers the damages first, and your policy only kicks in after your friend’s policy limits have been exhausted. Should you have a newly acquired car, if there is a policy or warranty already covering that car for damage, there will be no coverage under this fault based policy at all.
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