Car Borrowing Series: Checking Auto Insurance Exclusions

Posted in Auto Insurance

September 28th, 2009

Sometimes, being with a car can be a disaster. You may have to rearrange your routine to carpool with friends or family, and even borrow vehicles sometimes. Before either borrowing or lending a vehicle, it is imperative that the car owner take responsibility and check out their auto insurance policy exclusions to make ensure their insurance will cover all the necessary expenses if there is damage to the vehicle.

Check the Policy

Auto insurance exclusions that are not covered by your insurance company are always listed in your policy. For example, all insurance policies have a clause that makes insurance coverage void if the vehicle is damaged while involved in a street racing scenario.

Loaned Vehicle Exclusion

Depending on the state you live in, your auto insurance provider may include a Loaned Vehicle Exclusion clause in the terms of your coverage agreement which releases them of financial responsibility from accidents caused by parties other than the car owner using the vehicle. The good news is, that may not stand up in court. Just recently, the Oklahoma Supreme Court ruled that Loaned Vehicle Exclusions are against public policy, but you shouldn’t take any risks that you don’t have to.