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Car Insurance Exclusions: What you dont know


Patricia Babalis

By Patricia Babalis

3 min read

When was the last time you took a close look at the fine print of your car insurance policy? If the answer is never then you may be surprised to learn about these five common exclusions.

In insurance policy speak an “excluded event” is something that you will not be covered for. Whilst the following list may not seem like events that would happen every day it is important to be aware of these exclusions so that you’re not caught out if an accident does occur.

Here are some of the more common events that are excluded in car insurance policies:  

  1. The driver is not authorised by the vehicle owner: In the event that a friend borrows your car without first asking permission and gets into an accident, cover may be denied by your insurer.
  2. The vehicle is hired to a friend for a fee: Even if the vehicle has been hired out with permission to your friend exclusions may still apply if there is a crash. It is best to check your insurance policy before promising your friend anything.
  3. The driver was under the influence of alcohol but was not tested for blood alcohol content by law enforcement: A common exclusion amongst car insurance policies is to deny cover if a driver has been in an accident whilst intoxicated even without specific reference to having been tested by Police.
  4. The car had an un-roadworthy part: If your vehicle had a part that was deemed un-roadworthy, even if it did not directly cause the accident, your car insurer may have the right to deny cover under an exclusion clause for un-roadworthy vehicles
  5. The car was carrying more passengers than it was designed to: If you are involved in an accident whilst there are more passengers in the car than seats and seatbelts your car insurer may claim an exclusion and you will not be covered by insurance.

The above examples are only five of dozens of exclusions that you may find at the bottom of your car insurance policy. Make sure to read the Product Disclosure Statement before signing up for insurance as once you sign you are bound in a legal contract. Also be aware of long standing rules that might catch you out. For example, often if there are two clauses relating to an accident, and one is an exclusion, than the exclusion will prevail.

While it may seem hard to get your head around, one of the best places to start is by committing to reading the fine print before signing any car insurance policy so that you are aware of all exclusions. It is also valuable to compare car insurance policies to find the one that will best suit your personal needs.

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