Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Jul 19, 2021

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We’ve already discussed who is covered under a personal auto insurance policy. That post will let you know who your insurer considers to be a “named insured” on your car insurance policy and who is covered to drive your car.

Now let’s look at when you’re not covered by an auto insurance policy.  The reality is; you are paying for insurance and expect to be duly compensated if the “unknown” occurs.

However, there are some instances when your car insurance company will simply refuse to pay for damages resulting from your (or someone else’s) operation of a your vehicle, whether you have an insurance policy or not.

Some of these instances may seem obvious, or even ridiculous, but your insurer wouldn’t bother to specifically exclude coverage for them if they weren’t commonplace occurrences on U.S. roadways.

Below is a list of situations or accidents where you might not be covered, and therefore will not receive any compensation. Of course, every policy is different and every insurance claim is unique. Always be sure to contact your insurer or agent to determine if coverage exists for your particular claim question.

When an Auto Insurance Policy Won’t Cover You

  • There are a number of reasons why your car insurance may not cover you
  • Possibilities include policy lapse, non-listed vehicle, non-covered vehicle
  • Non-disclosed business use
  • Or a variety of crimes such as racing, road rage, and so on

Your Policy Lapsed – Your insurance company will not respond to any claim you make if your policy is not paid up-to-date. Miss a payment and all bets are off. You do not have insurance coverage if your policy is not “in-force” as a result of you not paying your premium in a timely manner.

Note: You will receive a notice of cancellation from your insurer if you are behind on your payments. This notice will show the exact date and time your policy will be cancelled if payment is not received. You can expect at least a 10-day notice of cancellation for non-payment of premium.

Non-Listed Vehicles – Your insurance company may deny a claim for damages to a vehicle that you own and didn’t tell them about, or if you have an accident in a car to which you have “regular access” to drive but is not specifically listed on your policy.

This includes your girlfriend/boyfriend’s car if she/he lives with you (and you have a key to their car on your keychain).

Note: There is a new (or replacement) car grace period clause on insurance policies that gives you a “reasonable” amount of time to notify your insurer of these commonplace changes.

Your Motorcycle – Vehicles with less than four wheels or those not made for use on public roads are not covered by a car insurance policy. You will need to purchase a separate policy for your “bike.”

Note: Recreational vehicles, four-wheelers and golf carts are not typically covered by a car insurance policy because they are not cars…

Street Racing – you are never covered for liability or property damage claims resulting from preparing for, practicing for or actually racing your car.  This includes speed contests where you are not competing directly against another vehicle. Sorry 2 Fast 2 Furious fans…

Making a Profit – This common car insurance policy exclusion states that you are not covered while using your vehicle to transport people or products with your vehicle for a profit. The insurer expects you to get a commercial auto policy for this coverage. Some examples include limousines, taxi cabs, church vans, etc.

Causing Trouble – You are not covered for any intentional bodily injury or property damage you cause.  Yes, I am referring to road rage.  This exclusion proves you are not the only person thinking of ramming the driver doing 45 mph in the left lane on the highway.  If you attempt to live out this fantasy, you will not be covered.

Personal Property – This is one of the most common auto insurance myths out there. Your iPhone, wallet, and laptop are not covered while in your car.  These items are covered in a homeowner’s policy under “personal property.”

Upgrades –  Any non-factory installed audio/video equipment (speakers, antennas, TVs) in your vehicle are typically not covered in the event they are damaged or stolen in an accident.

As always, every policy is different and this article aims to discuss the basics.  Call your independent agent or direct insurer regarding your specific policy if you are ever unclear about anything.