Deal Breakers That Could Negate All Coverage
On Your Arizona Auto Insurance Policy
The personal auto insurance policy in Arizona has a number of exclusions when it comes to liability coverage.
These exclusions not just narrow coverage, they are essentially deal breakers which leave you with no coverage
from the most important risk that the auto policy you purchased was intended to protect.
These exclusions remove all coverage for bodily injury and/or property damage:
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Intentional Injury or Damage
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Property Damage to Owned or Transported Property
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Care, Custody or Control
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Bodily Injury to an Employee
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Public or Livery Conveyance Use
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Other Business Use
Making Sense of These Exclusions - What it Means in Real World Terms
For many of these exclusions, other insurance policies cover the risk better than the personal auto policy. The
point is simply this - as you go through your daily life just be aware in the back of your mind that you should
exercise extreme caution. These exclusions are filed by the insurance company they will stand by them and may
well deny coverage leaving you exposed to financial ruin.
Other agents or Internet insurance portals probably will never go into this level of explanation. The reason is
simply this - they are likely not experts in the personal auto policy here in Arizona. These exclusions
take away all coverage and put everything your family has - your home, your assets, your income at risk.
You should, as a prudent and knowledgeable client, know what the policy says. You have everything at risk.
Not knowing or at least be able to recognize these financial minefields is not a risk you should undertake.
Intentional Injury or Damage
It is not the intent of the personal auto policy to pay claims that could be against public policy. What this means
is that in a fit of passion or anger you can't ram another vehicle, possibly injure others and then expect your
insurance company to pick up the tab for the damages. What the courts have upheld in situations like this are - the
ramming of the other vehicle was intentional - no coverage for the collision to your car and the property damage to
the car you rammed. However, if there were injuries you may be able to pick up some liability coverage as the property
damage was "intentional" but the resulting injuries were "unintentional" and may well be covered. Don't bet your house
on this interpretation - intentional acts are excluded.
Property Damage to Owned Or Transported Property
The idea in the first part of this exclusion is that you can't sue yourself. If you run into your own garage or back
over your children's bike - no coverage under the auto policy (the garage would be covered under the your homeowners
policy; your children's bike would be covered under the going to the store quickly and buying the newest and shiniest
one you can find premise).
The second part is transported property. Let's say that your friend asks you to help him move and transport some of
his belongings. If you have an accident that is your fault along the way and his belongings are damaged - no coverage.
Care Custody Or Control
This exclusion applies to property that is damaged while it is in your control. If you borrow your neighbor's lawn mower
and hit it with your car - no coverage for the lawn mower. If you borrow your brother-in-laws motorcycle and knock it over
with your car - there is no coverage under your policy for this. The motorcycle policy would have to come into play here -
if there is no collision on the bike - you should hope that your brother-in-law is not bigger than you...
Bodily Injury to an Employee
Let's say you own a business and take your office manager to the bank and post office and are running errands. If you have
an accident and your office manager is injured - that liability is excluded. Workers Compensation would apply here.
Public or Livery Conveyance Use
On the surface this seems simple enough, under your Arizona personal auto insurance you can't use your car as a taxi service
or your own personal limo company. This makes sense, but good people who didn't intend to defraud the insurance company or try to
get away with anything have triggered this exclusion.
A couple of examples illustrate the point. If you use your minivan to transport school kids on a particular field trip and is
reimbursed by the school district for incidental expenses, such as gas and tolls, this is not considered a public livery - this is
okay - coverage would apply.
How about if the same insured picked up and dropped her children and other children in the neighborhood, every day and was paid by the
other children's parents for the convenience. Say there is a serious accident, one where the entire policy is subject to lose - the
insurance company could well say this is an excluded activity and deny all coverage. Remember we are talking about a soccer mom here
who was in no way trying to defraud the system, but without knowing it - everything that the family has worked for is seriously at risk.
Here with the exclusion of coverage, not only would the family have to pay whatever claims occurred - the liability, the property damage,
the collision to their own car, but also would have to find a lawyer to defend the suit and pay for that as well. This is a nightmare and
it could have easily been avoided by simply asking an expert.
Another example points out how common this problem is. To make extra money your teenager takes a job as a pizza delivery person. Decent
money, discount on pies - no big deal right? Remember, a certain national pizza company that used to have a half hour guarantee that is no
longer used? This exclusion is the reason. Young drivers driving on possible unfamiliar streets in a hurry is a liability that almost
every insurance company will be reluctant to take.
If you or your family have any kind of exposure like this - call our office and discuss it. We will go to our underwriter and get a written
response detailing the insurance company's position.
In both of these scenarios everything a family has is at risk. The people weren't criminals - real life needs real answers.
We, as local Chandler auto insurance experts have the tools, training and resources to correctly address these possibly
life altering risks. Insurance portals and call centers may or may not answer your question, if you even know to ask the question.
Other Business Use
The Arizona personal auto insurance policy excludes loss due to "business" exposures. A fairly standard explanation of business
includes trade, profession or occupation. There is a coverage give back for businesses using private passenger vehicles - a realtor
taking clients to see houses in his/her own car is acceptable. If the vehicle is titled to the business, this vehicle will normally
have to be put on a commercial auto policy, but you should call our office to discuss this scenario.
This exclusion drills down on the "trade" exposure. Trade is the "business or work in which one engages regularly; an occupation requiring
manual or mechanical skill". Here is what the policy is honing in on.
John is a small one man band artisan contractor who installs ceramic tile and does light carpentry. He does business as John Smith d/b/a
John's Tile & Carpentry. In other words, in his own name as John Smith. His pickup truck is registered to John Smith and he goes onto the
Internet to buy the cheapest auto insurance policy he could find online, gets his ID card and goes off about his life. This scenario
happens every day.
The problem - this exclusion, which insurance companies specifically look at vans, pickups, and panel trucks if they are carrying tools and
supplies will take away all coverage and leave the insured having to pay to defend the claim out of their own pocket.
Because the vehicle is in John Smith's personal name, the lawsuits will be directed at him personally. Everything he has worked for is now
completely and totally exposed.
John wasn't a criminal. He was uninformed and did what many people do - looked only at the price. He is not an insurance specialist. But
because he didn't know to ask, he is facing a financial calamity.
Each of these Exclusions Have Taken Away Coverage in Real Life
The insurance companies didn't just dream up these exclusions, but instead an insurance company somewhere got hit with a loss that they
never intended the policy to pay for and after paying the claim vowed "never again".
These exclusions take away all coverage. If you don't read the policy, you may not have any idea where coverage begins and ends. How
could you? You don't want to bet your entire family's asssets on intuition or assumptions.
Bottom line, while everybody is looking for the absolute cheapest auto insurance policy here in Arizona, the simple truth is this -
the personal auto insurance policy is one of the most frequently used in terms of the number of claims. You are making yourself the
expert and betting your family's future on something in which you are not an expert. You can try calling a call center abroad and see
how you make out there - but ultimately you are on the hook if there is a coverage dispute.
With literally everything at risk, you need an expert - one that you can rely on and one who is accountable for the guidance they give
you.
We are local Chandler AZ personal lines insurance experts. We know where the coverage begins and ends. Our entire job is to
make sure our clients are adequately protected.
We're Just a Phone Call or Click Away
Your time is your most valuable resource. When you need us, we will respond. In a few quick
minutes we can give you a free
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