Times Personal Auto Insurance Won’t Cover You

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Contributor, Benzinga
April 19, 2022

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Having auto insurance means you aren’t on the hook for damages when you have an accident. This is true with a few exceptions. Keep reading to find out more about 20 times when you’re not covered by personal auto insurance.

20 Times You’re Not Covered by Personal Auto Insurance

Auto insurance is an important coverage and is mandated by law in most states. While auto insurance will cover most types of losses you might experience, there are a few situations that are excluded from coverage. Here are some common auto insurance exclusions:

  1. Racing: Normal automobile insurance won't cover injuries or damages during racing, stunts or other enthusiast events. When attending such events, you can consider add-ons.
  2. Acts of God:  Floods, hurricanes, tornadoes and other natural risks may be excluded from your car insurance coverage.
  3. Commercial use: If you use your car for any type of business purpose, your personal auto policy won’t cover it. You’ll need to purchase commercial auto insurance.
  4. Normal aging: If your car's engine fails or the paint chips, you can't sue your insurer for compensation. The same goes for mold or pest infestation damage.
  5. Willful damage: Intentional damage is a common occurrence among motorists, especially among first-time automobile owners. Your insurer will not honor your claim if you purposely damage your car by things like using it as a weapon, setting it on fire or kicking it out of rage.
  6. Family members: Assume you have liability coverage and cause a car accident. While your liability covers damage you cause to others, your liability coverage does not protect you or any family members in the vehicle.
  7. No-fee medical payments:  Medical payments cover death and bodily injury in your car. Medical costs have the same exclusions as liability coverage. 
  8. Employee injury: Losses should be covered by worker's compensation, not your personal auto coverage.
  9. If you live in your car: An insurance company may refuse coverage for a claim involving a vehicle used as a dwelling.
  10. Damage to your own car: Your liability insurance does not have to cover damage to your car. You'd need collision or comprehensive coverage.
  11. Repossession or police seizure:  Government confiscation or repossession of your vehicle excludes insurance coverage.
  12. Unlawful act: If you get into an accident while doing anything unlawful, your insurance may not cover you.
  13. Unauthorized auto modifications: Notify your insurance company if you want to personalize your vehicle. Your insurance company assumes your car has standard equipment. So any changes you make won't be covered by a standard policy.
  14. Physical damage for nonowner car insurance: Nonowner insurance provides liability coverage for instances when you drive a vehicle you do not own. However, because there is no specific vehicle assigned, there is no comprehensive or collision coverage.
  15. Personal belongings: Personal belongings damaged in an accident are unlikely to be covered. However, a homeowners or renters policy may cover possessions.
  16. Catastrophes: Nuclear accidents, war and other catastrophes are not covered by car insurance.
  17. Leaving the U.S.: Most American insurance coverages are only valid in the U.S. Leaving the country may void your coverage. It is generally possible to add coverage for nations like Canada and Mexico. Always check with your insurance provider first.
  18. Named-driver exclusion: The named-driver exclusion removes specific drivers from your policy, making them uninsured. Your coverage normally covers permissive usage, so if you lend your car to someone, they are insured if they are in an accident. If a motorist is specifically excluded from your policy, coverage ceases. You may choose to exclude a driver for several reasons. First, removing drivers with poor driving records or infractions (like DUIs) can save you money on your rate.
  19. Mechanical breakdown: This is covered under your car’s manufacturer’s warranty. Ask your dealership whether you need a copy of the warranty to understand what is covered and for how long.
  20. A totaled vehicle if your car is leased: If you owe more on your car than it is worth when you total it, your car insurance company will not pay the difference to your lender. For this coverage, you will need to purchase gap insurance.

When Do You Need Commercial Auto Insurance?

Any time you use your auto in the course of operating a business, whether it is a home business or your employer’s business. You will need to purchase commercial auto coverage. Here are a few examples of times you will need to buy commercial auto insurance. 

  • If you are a delivery driver such as a pizza delivery driver
  • Rideshare services such as driving for Lyft or Uber
  • If the vehicle is owned by a corporation or partnership, employees operate it.
  • You perform services with your vehicle
  • Transporting goods or persons for a charge
  • Towing a trailer or hauling heavy tools or equipment in your car
  • Because of your job, you need larger liability limits

Common Riders for Personal Auto Insurance

Optional auto coverage, sometimes call policy riders, is available to you even though each type of coverage may not be required. Depending on what state you reside in, some types of coverage may be mandatory for your particular state. 

Here are some examples of optional auto insurance:

  • Personal injury protection: Your state may or may not require personal injury protection coverage. It helps pay for medical bills after an accident and may also cover lost wages.
  • Medical payments: Your liability coverage only covers other people's medical bills. If you buy medical payments insurance, it will pay for medical treatment for you or a family member regardless of who is to blame in an accident.
  • Towing and labor: After an accident, towing and labor costs are covered. The services provided by towing companies vary based on the insurance company.
  • Uninsured or underinsured motorist: This coverage varies by state. The uninsured or underinsured motorist coverage pays for your medical bills and property damage. It's good coverage to have, and it's usually cheap.
  • Gap coverage: Gap coverage can help pay off an auto loan if your automobile is stolen or wrecked in an accident. It pays the difference between what you owe and what your car is worth.

These are only a few examples of optional coverage. For a complete list of optional auto coverage, contact a local insurance agent or company representative.

How to Save Money on Auto Insurance

When shopping for auto insurance, be sure to take advantage of any available discounts to get the best deals. If you have both home and auto insurance, you may be eligible for a discount if you combine the two policies. You may also be eligible for the following discounts:

  • Good driver: As a good driver, you may be eligible for a 10% to 30% discount on your vehicle insurance premiums.
  • Good-grades discount: Many insurance companies offer discounts to students with a 3.0 or B grade point average or higher. A 10% discount for being a good student is the norm.
  • Low-mileage discount: A low-mileage discount may be available if you only drive a few miles each day to work or less than 7,500 miles per year.
  • Security system discount: A security system or VIN etching can save you up to 15% on your auto insurance premium if they are installed in your vehicle.

Additionally, you can save money by comparing your coverage options and selecting a higher deductible for full-coverage auto insurance (comprehensive and collision). Increasing your auto insurance deductibles, for example, could save you at least 10% on your auto insurance premium.

To determine whether you qualify for any auto insurance discounts, contact your insurance provider. To ensure you always get the best car insurance rates, be sure to shop around for auto insurance to compare pricing and coverage options. 

Compare Auto Insurance

You should do your research and look around for the best value on car insurance. Compare different types of coverage and think about how much each type of coverage costs. The goal is to get the best coverage for the least amount of money. Benzinga has put together a list of the best car insurance companies so you can find the best deal on auto insurance. 

Frequently Asked Questions


What is an auto insurance score?


Your auto insurance score tells insurers how likely you are to file a claim. Several factors, including payment history, quantities owed, length of credit history, new credit and types of credit, are used by the insurer to decide your vehicle insurance rate.


How do I qualify for cheaper auto insurance with bad credit?


Auto insurance is expensive enough. Car insurance prices are higher for high-risk drivers with fines and bad credit. Consider taking a safe-driving course and improving your credit rating. Before you know it, you’ll be qualifying for lower vehicle insurance premiums.

About Janet Hunt, Insurance Agent

Janet has been working in, and writing about, the insurance industry for over 20 years.