There are 14 exclusions under this section of coverage. Many of these exclusions we have already reviewed in other sections of the policy so a very brief mention is all that is needed for those. Others will be discussed in more detail to add clarification plus some examples of controversial claims. The following are the exclusions:
1. Using the vehicle as "public or livery conveyance". This is merely a continuation of the same application of this exclusion we have seen in the other sections of the policy.
2. Damage due to and confined to: a. Wear and tear
b. Freezing;
c. Mechanical or electrical breakdown or failure; d. Road damage to tires.
This exclusion (2) does not apply if the damage results from the total theft of "your covered auto" or any non-owned auto".
The wear and tear exclusion has caused a great deal of controversy. Note that the clause begins with "damage due and confined to". Many in the industry feel that only the part that failed, froze or otherwise broke is all that is excluded. In other words, the other parts of the engine would be covered if additional damage resulted. Let us assume that the threads that hold the oil filter in the motor have worn out, the oil filter falls out and all the oil drains out of the motor. The actual loss is confined to the threads of the oil filter. It is felt by many (though not all) that the resulting damage is covered.
Time is apparently a factor as respects wear and tear but not so much as with mechanical breakdown and the road damage to tires. Assume an insured has gone off an icy road and becomes stuck and starts to rock the vehicle back and forth to extract himself. He puts the car in drive and then reverse. Finally, the transmission fails. Is this covered by "other than
collision"? Some feel if the vehicle is relatively new then the loss could not have been caused by wear and tear or by mechanical breakdown. Even though the insured actually caused the loss it would have to be shown that it was his intent to cause the damage. Again, this is very
argumentative.
3. This exclusion deals with war, nuclear hazards and risks etc.
Exclusions 4, 5, and 6. These exclusions deal with the exclusion of certain electronic equipment. Basically, the form excludes coverage for loss to electronic equipment used to reproduce sound and their accessories such as tapes, discs, etc. The form states these are excluded unless the equipment is "permanently installed". That is the keyword. Items that are not "permanently installed" create an easy target for thieves. If permanently installed, then the accessories are also covered. Exclusion 5 lists several items that are excluded even if they are "permanently installed with the exception of a "permanently installed telephone". These are as follows: citizens band radio; telephones, two-way mobile radios; scanning monitor receivers; television monitor receivers; video cassette recorders; audio cassette recorders; and personal computers. Coverage can be purchased for many of these items by paying an additional premium.
A total loss to "your covered auto" or any "non-owned auto" due to destruction or
confiscation by government or civil authorities. This exclusion does not apply to the interests of Loss Payees in "your covered auto".
An example of an excluded loss would be one in which drugs were found in the insured's vehicle and the government seized the vehicle. The insured is not covered but any loss payee would be.
This exclusion deals with physical damage to trailers either owned or non-owned by the insured. The insured is not covered for damage to an owned trailer and its accessories unless the trailer is shown on the declarations page and a premium paid. We already know that coverage is automatic for liability coverage. The exclusion does not apply to non-owned trailers, but the policy limits coverage to only $500 so the agent and the insured should use caution when a non-owned trailer is involved for physical damage coverage.
This exclusion deals with the reasonable belief that the insured or family member has
permission to operate a "non-owned" auto. We have already discussed the permission clause in other sections of the policy.
The policy excludes coverage to equipment designed or used as a radar detector.
This exclusion eliminates coverage for custom furnishings or other equipment the insured as added to the vehicle. Items such as special carpeting, furniture, murals or other type paintings or decals can be covered by paying an additional premium. An exception is made for pick-up truck liners and caps, so they are covered.
This exclusion eliminates physical damage to a "non-owned auto" being maintained or used in the business of selling, repairing, servicing, storing or parking such vehicle. This includes road testing or delivery. Insureds with this business exposure must be covered under a form of
physical damage coverage for garage type operations called garage keepers liability. Should the insured be a mechanic working in a garage and has an accident with a customer's vehicle, coverage would be excluded for the mechanic and garage.
This exclusion eliminates coverage for an insured vehicle being used in a facility designed for racing in a pre-arranged race or speed contest.
This exclusion eliminates coverage to a rental car company where the insured has purchased coverage with the rental car company. When a vehicle is rented, the insured has a choice to either choose the physical damage waiver and purchase the rental car company's insurance or not purchase their insurance. In the rental agreement the rental car company has agreed to waive its right against the insured or family members for physical damage to the rental vehicle should the waiver coverage be purchased.