What is not covered by liability insurance?

Passenger Insurance

Sometimes it can take a long time to determine who caused the accident. Your passengers then have to wait a long time before the insurer pays for the damages. Passenger insurance helps you avoid this problem, because it provides quick payouts regardless of who is at fault.

Exclusions

There are situations in which your insurer is not required to compensate for damage caused by your company car. For example, if your car is stolen. If the thief causes damage using your company car, the other party can seek compensation from the Guarantee Fund. Joyriding without your car being broken into by force is not considered theft. In that case, the liability coverage under your business auto insurance policy does apply.

Are you participating in a legal car rally or other race? If so, your insurer is not required to cover your damages. That’s because the race organizer has arranged group insurance for all participants. What if the organizer hasn’t taken out group insurance? Even then, your insurer is not required to pay for the damages. That’s because you are not insured for participation in road races.

In all other situations, your auto insurer must always compensate the other party for the damages. However, your insurer may seek reimbursement from you for the damages. In that case, you’ll have to pay for the damages yourself. This is only possible if the insurer has included the exclusions in the policy terms and conditions. These exclusions usually apply when the damages are caused by:

• by a driver who has had too much to drink
• by a driver without a (valid) driver's license
• was made intentionally or with your approval
• while the car is being used for a purpose other than that specified, such as a taxi (even though private auto insurance has been purchased)