Exclusions
You will not get any UM coverage for damages to your car if any of these conditions exist under our sample fault-based auto policy:
This coverage does not apply to:
(1) loss to an insured car for which insurance is not afforded under Part IV Coverage K1-Uninsured Motorists Bodily Injury Coverage; or
(2) damage to personal property regardless of ownership; or
(3) loss to your insured car while used to carry persons or property for a charge. This exclusion does not apply to shared-expense car pools; or
(4) loss to sound equipment and sound equipment accessories which are not permanently installed in your insured car; or
(5) loss of use of your insured car.
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Explanations
Here are further explanations for the exclusions that require them. Number (1) says that if you don’t carry UM Bodily Injury insurance on your policy, then you also do not have UM Car Damage insurance benefits. Under Exclusion (2), this coverage will not pay for damage to other personal property—only damage to your vehicle. Under number (3), if you use your car to transport people (i.e., a taxi) or property (i.e., delivery van) for a fee, your UM Car Damage coverage will not pony over to pay any car repair bills should have an accident with an uninsured motorist. Number (4) is self-explanatory. Number (5) says you won’t be able to collect for the loss of use of your car while it is being repaired under this coverage. Some policies provide rental car coverage, so you may be able to find that benefit elsewhere in your policy.
Limits of Liability
Like all coverages, the limits of liability is the maximum the insurance company will pay for your UM claim for car damage. Here is the policy wording:
Our liability for loss is limited to the following:
(1) if your insured car is insured under Part V Car Damage or Part VI All Risks Physical Damage, waiver of the deductible amount shown in the Declarations applicable to either Part; or
(2) if your insured car is not insured under Part V Car Damage or Part VI All Risks Physical Damage, the lesser of (a) the actual cash value of your insured car or (b) the amount of money necessary to repair or replace your insured car, but in no event shall our liability exceed $3,500;
Regardless of the number of policies or vehicles described in the Declarations, we will pay no more than the limit of liability shown in paragraph (2).
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Explanation
Please see articles on Part V—Car Damage and Part VI All Risks Physical Damage for further explanations about these specific coverages referred to above. Suffice it to say here that if you have coverage under either of these two Parts of the policy, your damages will be paid for and your collision deductible will be waived. If you do not have coverage under either of these two Parts, your collision deductible will not be waived, and the company will pick up either the actual cash value of your car or the cost to repair it, whichever is less, but only up to a maximum of $3,500.
Example
Suppose your car is damaged in an accident with an uninsured at-fault motorist. You do not carry either Part V—Car Damage or Part VI All Risks Physical Damage on your policy. The damage to your car is $4,600, and your car is worth $8,900. Since the cost to repair is less than the actual cash value, the insurance company will pay the lesser, but you will only get $3,500, since that is the insurance company’s limit of liability.
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