Exclusions
You may not collect benefits under this section of the fault-based policy if any of these conditions exist.
This coverage does not apply to loss:
(1) to your insured car while used to carry persons or property for a charge. This exclusion does not apply to shared-expense car pools.
(2) caused by war, nuclear reaction, radiation or radioactive contamination.
(3) to sound equipment and sound equipment accessories which are not permanently installed in your insured car. This exclusion does not apply to theft from your insured car of tapes or compact discs designed for use with sound equipment permanently installed in your insured car.
(4) to awnings, cabanas or equipment designed to provide additional living facilities.
(5) resulting from wear and tear, deterioration, freezing, mechanical or electric breakdowns or failure, or road damage to tires. But, coverage does apply if the loss results from the total theft of your insured car.
(6) to a vehicle not owned by you when used in automobile business operations.
(7) sustained to any vehicle operated in any race or speed contest.
(8) 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.
(9) caused intentionally by you or any other person using your insured car with your permission.
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Explanations
Most of these are self-explanatory, but let’s talk about some that are not. Exclusion (1) says that there will be no collision or comprehensive coverage if you have an accident while carting around passengers (i.e. a taxi service) or property (i.e. delivery service) for a fee. You will have to take care of the bill.
Exclusion (3) says there is no coverage for theft or damage to sound equipment not permanently installed in your car. For example, if you attach an MP3 player to your car stereo by plugging it into the power source (formally known as a cigarette lighter), and it’s damaged or stolen, you are out of luck.
Exclusion (5) is usually referred to by the insurance industry as the wear and tear exclusion. The circumstances listed, although not covered under the Car Damage Part (unless occurring as a result of theft of the vehicle) may be covered elsewhere in the policy, such as under the All Risks Physical Damage Part, discussed in a separate article.
Exclusion (8) is an interesting one. It is referring to a decrease in value of your car or a piece of permanently attached equipment as a result of a covered loss. If you had a customized piece of equipment, like twenty inch revolving rims, a custom paint job, or a costly sound system, for example, which may have added value to your car, and it was damaged, your insurer will not pay you for the decrease in value to your vehicle.
Exclusion (9) says any damage caused by intentional acts will not be covered. If your friend borrows your car (with your permission) and decides to intentionally drive it into his garage without opening the garage door first, sorry, no coverage.
Limits of Liability
The limits of liability, that is, the maximum your insurance company promises to pay for your Car 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.
In no event shall our liability for the cost of repairing a part or the whole of the finished surface of your insured car extend to custom or extraordinarily painted finishes or to painted scenes or graphics on or a part of such finishes. However, our liability will be limited to and shall not exceed the cost of the automobile manufacturer’s standard factory-painted finish.
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Explanations
These are fairly self-explanatory, but a little more explanation might help with some of them.
Limit (2) says that if you are towing someone else’s utility trailer, our sample policy will only pay up to $500 for damage to it.
Limit (3) allows for reimbursement of $50 for CDs or tapes, which are stolen, from your car, but they must be for use in your permanently attached car stereo. If you carry around a portable CD player and the CDs are meant for that, no go. You’ll foot the bill.
The final paragraph in the above policy wording goes hand in hand with Exclusion number (8) discussed earlier. Your insurer does not wish to be liable for customized paint jobs and will only pay the cost of a manufacturer’s standard factory-painted finish. If you want the custom job you had before the accident, the balance is on you.
Overlapping Insurance Policies (Other Insurance)
This section addresses the issue of when you are covered by multiple policies. The policy wording is:
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 or warranty protection.
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Explanations
In the situation where there is more than one liability policy covering your repairs, if you are in a wreck while driving your friend’s car, and the other insurance is your friend’s policy on his car, your friend’s policy covers the damages first up to the policy limits. Your policy steps in and pays the remainder. Don’t worry about who’s primary and who’s secondary. The insurance companies will sort it all out. 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 policy at all.
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