Your water heater may remain unseen, hidden in a utility closet, or sitting alone in a basement, but keep in mind that it needs regular maintenance for safety reasons. To make sure yours is safe, get to know its parts and learn some important facts.

Water heater parts
Most residential tanks hold 40 to 60 gallons and have to hold the pressure of a residential water system, which typically runs at 50 to 100 pounds per square inch (psi). Steel tanks are tested to handle 300 psi and normally have a bonded glass liner to keep rust out of the water and insulation surrounding the tank. Other water heater parts include:

  • A dip tube to let cold water into the tank
  • A pipe to let hot water out of the tank
  • A thermostat to control the temperature of the water inside the tank
  • Heating elements similar to those inside an electric oven
  • A drain valve that allows you to drain the tank to replace the elements or to move the tank
  • A temperature or pressure relief valve that keeps the tank from exploding
  • A sacrificial anode rod to help keep the steel tank from corroding

Temperature or pressure relief valve
A temperature or pressure relief valve helps prevent a tank from exploding if temperature or pressure exceeds safe limits. Unfortunately, residential valves are somewhat prone to failure. As part of your annual water heater care, test this valve by:

  • Pulling up on the handle to make sure water flows freely out and stops when you let go of the handle.   If it does nothing or runs or drips, then the valve should be replaced.
  • Flushing the water heater through the drain valve at least once a year to remove sediment buildup. You should have a drain line, usually within about 6 inches of the floor, or plumbed outside.  This is to prevent you from being scalded if the valve should open while you’re standing next to it.

Temperature control
On residential tanks, the settings are normally warm, hot, very hot, or something similar. There is so much variation on what these settings mean, but the right temperature is at least 130 degrees at the tap, which you can test with a meat or candy thermometer.

It is important to keep the temperature close to 130 degrees. Even though you can be scalded at 130 degrees if you spend long enough under the water, you’ll probably drawback before that happens. If the temperature is below 120 degrees, Legionella bacteria can grow, and you could catch Legionnaire’s disease by inhaling the mist when you take a shower.

Temperatures above 130 degrees increase your scalding risk, encourage sediment buildup, and waste energy.

When leaving for vacation, set the water heater temperature at its lowest setting. This will save money and reduce the risk of any problems while you are away. Also, if your faucets are sputtering, spitting, and spewing, it could be a sign that your water heater is overheating.

Vents
A poor draft can cause fumes and carbon monoxide to come back into the room instead of outside. To maintain good ventilation, make sure that:

  • The vent is the same diameter as the tank’s draft diverter.
  • The vent goes straight up and out, without any dips.
  • Where it passes through walls or roofs, it is double-walled. Single-walled vent sections should be screwed with 3 screws per section, especially in earthquake zones.

Earthquake straps
Strapping your water heater is a good idea, even if you live outside an earthquake zone. If your water heater were to fall over for any reason, it could sever the gas line and cause an explosion.

Additional water heater safety tips
Keep safe by following these water heater recommendations:

  • Remove paper, accumulated dust, or other combustibles from the heater enclosure.
  • Extinguish the pilot light before using flammable liquids or setting off aerosol bug bombs.
  • If the device is in the garage, raise it, so the pilot light is 18 inches above the floor.   This helps prevent the ignition of gasoline vapors that collect near the floor.
  • Consider installing an automatic gas shutoff valve that stops the gas flow if the ground moves or if gas flow increases dramatically. The valve, which costs around $300, prevents fires when a gas line breaks due to flood, earthquake, or other disasters.
  • You may also want to insulate the first 6 feet of the hot water pipe and the first 3 feet of the cold water pipe that extends from your hot water tank. Insulating the hot water pipe reduces heat loss, and insulating the cold water pipe reduces “sweating” in the summer. You can find pipe wrap insulation for this purpose in most hardware stores.
  • Do not use pipe wrap or any other insulation within 6 inches of the draft hood or flue exhaust vent at the top of the natural gas water heater. –

Did you know that if you own a trampoline that your homeowners insurance will either surcharge you for the increased risk or exclude the claim from coverage? In fact, many insurance companies will refuse to write policies for homeowners with trampolines altogether.

Why are insurance companies so averse to covering trampoline-related claims? They seem harmless enough. In reality, trampolines are actually very dangerous and can put you and your personal assets at risk if someone injures themselves on your premises.

According to the Consumer Product Safety Commission and American Academy of Orthopedic Surgeons, trampolines account for over 100,000 emergency room visits every single year at the cost of over $100 million.

Of those injuries, 92.7% involve children under the age of 16, and 59.5% resulted in a broken bone. Even worse, an AAP study from 2012 pointed out that current data on netting and other safety equipment indicates no reduction in injury rates.

If you do own a trampoline, please follow the safety items below to help prevent injuries.

Trampoline Safety Measures
The first safety measure with trampolines recommended by the American Academy of Orthopedic Surgeons, the Canadian Pediatric Society, and the Academy of Sports Medicine is to avoid them altogether.

As one E.R. Doctor recently lamented to the parent of a child injured on a trampoline, “Trampolines are our worst nightmare in terms of the number of accidents they cause.”
If you do own a trampoline, we highly recommend taking these steps to help prevent tragic deaths and serious trampoline injuries, especially paralysis, fractures, sprains, and bruises:

  • Allow only one person on the trampoline at a time.
  • Do not attempt or allow somersaults because landing on the head or neck can cause paralysis.
  • Please do not use the trampoline without a full net enclosure and shock-absorbing pads that completely cover its springs, hooks, and frame.
  • Place the trampoline away from structures, trees, and other play areas.
  • No child under 6 years of age should use a full-size trampoline as they are the most susceptible to bone injuries.
  • Please do not use a ladder with the trampoline because it provides unsupervised access by small children.
  • Always supervise children who use a trampoline. (Though, it is worth noting that over half of all trampoline injuries occur with parental supervision nearby.)

When you buy or lease a new car or truck, the vehicle starts to depreciate when it leaves the car lot. In fact, most cars lose 20 percent of their value within one year. Standard auto insurance policies cover the depreciated value; in other words, insurance pays the vehicle’s current market value. If you finance the purchase of a new car and only put down a small deposit, the loan amount may exceed the market value of the vehicle in its early years of ownership. Gap insurance is available to cover the “gap” between what a vehicle is worth and what you owe on it.

It’s a good idea to consider buying gap insurance for your new car or truck purchase if you:

  • Made less than a 20 percent down payment.
  • Financed for 60 months or longer.
  • Leased the vehicle.
  • Purchased a vehicle that depreciates faster than the average.
  • Rolled over negative equity from an old car loan into the new loan.

While the car dealer may offer to sell you gap insurance on your new vehicle, most car insurers offer it—and it typically costs much less. Most auto insurance policies, including gap insurance with collision and comprehensive coverage, add only about $20 a year to the annual premium.

According to a report by Internet security firm Kaspersky Lab, in what could be one of the largest bank heists in history, more than 100 banks and ATMs have been rigged so that thieves could steal up to $1 billion in cash.

Hackers from Russia, Ukraine, China, and Europe were involved in the organized crime ring that was just recently exposed. The hackers installed spying software on bank computers, studied bank employee workflows to learn how to mimic their actions, and used their knowledge to transfer money into bank accounts set up in other countries.

While the report did not name specific bank institutions, it stated that financial institutions in at least 30 countries were affected, including the United States.

We all know that identity theft is the act of taking someone’s personal information and using it to impersonate a victim, steal from bank accounts, establish phony insurance policies, open unauthorized credit cards or obtain unauthorized bank loans.

What many people don’t realize, though, is that 7% of all U.S. citizens will be victims of identity theft over the next 12 months resulting in over $50 billion in costs.  Identity theft is also a long, arduous process for victims as they try to repair their credit, erase erroneous collection accounts, and restore their lives.

Did you know that many homeowners insurance policies actually offer some form of identity theft as part of the policy?  You can find out more about this coverage, its cost, and provisions within the rest of the article below.

If you would like to see if your policy includes identity theft coverage or would like to receive quotes on this coverage, please feel free to give our office a call.

Identity Theft Insurance

What is it? 
Some insurance companies now include coverage for identity theft as part of their homeowners insurance policy.  Others sell it as either a stand-alone policy or as an endorsement to a homeowners or renters insurance policy.

What does it cover? 
Identity theft insurance provides reimbursement to crime victims for the cost of restoring their identity and repairing credit reports. It generally covers expenses such as phone bills, lost wages, notary and certified mailing costs, and sometimes attorney fees (with the insurer’s prior consent). Some companies also offer restoration or resolution services that will guide you through the process of recovering your identity.

What does it cost? 
Some insurance companies will include identity theft coverage for no additional cost.  However, most will charge anywhere from $25 to $100 annually for the additional insurance coverage.

Tips for Avoid Identity Theft

  • Keep the amount of personal information in your purse or wallet to the bare minimum. Avoid carrying additional credit cards, your social security card, or passport unless necessary.
  • Always take credit card or ATM receipts. Please don’t throw them into public trash containers; leave them on the counter or put them in your shopping bag where they can easily fall out or get stolen.
  • Do not give out personal information. Whether on the phone, through the mail, or over the Internet, don’t give out any personal information unless you have initiated the contact or are sure you know who you are dealing with and that they have a secure line.
  • Proceed with caution when shopping online. Use only authenticated websites to conduct business online. Before submitting personal or financial information through a website, confirm the site is secure.
  • Make sure you have a firewall, anti-spyware and anti-virus programs installed on your computer. These programs should always be up to date.
  • Monitor your accounts. Don’t rely on your credit card company or bank to alert you of suspicious activity.
  • Order a copy of your credit report from each of the three major credit bureaus. Make sure it’s accurate and includes only those activities you’ve authorized.
  • Shred any documents containing personal information such as credit card numbers, bank statements, charge receipts, or credit card applications before disposing of them.

It’s a fact: teenage drivers account for more auto accidents than any other age group.
However, by practicing safe driving techniques―such as driving defensively―you’ll increase the odds you’ll keep yourself (and your passengers) safe on the road, and you’ll increase your chances of getting more affordable car insurance as you build a good driving record.

Safety Tips for Teen Drivers

Whether you’re just getting ready to hit the road or have been driving for months―or even years―take some time to review these 8 safe driving tips.

1) Keep Your Cell Phone Off

Multiple studies indicate using a cell phone while driving is the equivalent of driving drunk―that’s even when using a hands-free phone.
NOTE: Your state may prohibit the use of cell phones while driving. An increasing amount of states are creating laws regarding cell phone use and texting. Often, younger drivers face stricter laws.

2) Don’t Text

Research shows texting―on average―causes a loss of focus on the road for 4.6 seconds. You can drive the length of a full football field in that time. A lot can go wrong while driving the length of a football field without your eyes on the road.
Don’t try the “texting-while-stopped” approach, either, as many states ban texting while behind the wheel. And, when you have your head down, you won’t notice key developments that may occur. Remember, you still need to pay attention to the road when you’re stopped.

3) Turn on Your Headlights

Using your headlights increases your visibility and helps other drivers see you, even when you feel it’s light out.
In the early morning and early evening (dusk), you need to use your lights, or other drivers might not see you, which can be disastrous.

4) Obey the Speed Limit

Speeding is a major contributor to fatal teen accidents. That’s especially true when driving on roads with lots of traffic or with which you’re not familiar.
Don’t feel pressured to keep up with traffic if it seems like everyone else is flying by you. Driving a safe speed helps ensure your well-being and keeps you away from costly traffic tickets that can cause a sharp hike in your auto insurance premiums.

5) Minimize Distractions

It may be tempting to eat, drink, flip around the radio dial, or play music loudly while you’re cruising around town; however, all can cause your mind or vision to wander, even for a few seconds.
As an inexperienced driver, you are more apt to lose control of your car. Distractions can significantly increase the chances that you 1) not notice impending danger or notice it too late and 2) lose the ability to control the vehicle.

6) Drive Solo

Having a single teen passenger in your car can double the risk of causing a car accident. Adding additional teen passengers causes the risk to escalate.

7) Practice Defensive Driving

Always be aware of the traffic ahead, behind, and next to you, and have possible escape routes in mind. Stay at least one car length behind the car in front of you slower and maintain a larger buffer zone with faster speeds.
Some car insurance companies will even give you a discount if you take an approved defensive driving course to improve your driving skills.

8) Choose a Safe Car

If possible, drive a safe car with the latest safety equipment (such as anti-lock brakes, electronic stability control, and airbags) and one with an excellent crash safety record.

Final Word: Teens Becoming Safe Drivers

There’s no substitute for driving experience and the wisdom that age brings, but you’ll enhance the odds you won’t become a teenage driver accident statistic by applying the above tips. Also, when you have a good driving record free of accidents, it’s easier to find cheap car insurance in the future.

Safe Boating Tips

No matter how much experience you have, it’s always a good idea for everyone to review boating safety rules before departures. Below you will find 10 basic boating safety tips to help you stay safe:
  1. Be Weather-Wise. Always check local weather conditions before departure; TV and radio forecasts can be a good source of information. If you notice darkening clouds, volatile and rough changing winds, or sudden temperature drops, play it safe by getting off the water.
  2. Follow a Pre-Departure Checklist. Proper boating safety includes being prepared for any possibility on the water. Following a pre-departure checklist is the best way to ensure no boating safety rules or precautions have been overlooked or forgotten.
  3. Use Common Sense. One of the most important parts of boating safety is to use your common sense. This means operating at a safe speed at all times (especially in crowded areas), staying alert at all times, and steering clear of large vessels and watercraft that can be restricted in their ability to stop or turn. Also, be respectful of buoys and other navigational aids, all of which have been placed there to ensure your own safety.
  4. Designate an Assistant Skipper. Ensure more than one person on board is familiar with all aspects of your boat’s handling, operations, and general boating safety. If the primary navigator is injured or incapacitated in any way, it’s important to make sure someone else can follow the proper boating safety rules to get everyone else back to shore.
  5. Develop a Float Plan. Whether you choose to inform a family member or staff at your local marina, always be sure to let someone else know your float plan. This should include where you’re going and how long you’re going to be gone. A float plan can include the following information:
    • name, address, and phone number of the trip leader
    • name and phone number of all passengers
    • boat type and registration information
    • trip itinerary
    • types of communication and signal equipment onboard
  6. Make Proper Use of Lifejackets. Did you know that the majority of drowning victims are the result of boaters not wearing their lifejackets? Ensure that your family and friends aren’t part of this statistic by assigning and fitting each member of your onboard team with a life jacket before departure. Wear it!
  7. Avoid Alcohol. Practice boating safety at all times by saving the alcohol for later. The probability of being involved in a boating accident doubles when alcohol is involved and studies have shown that the effects of alcohol are exacerbated by the sun and wind.
  8. Learn to Swim. If you’re going to be in and around the water, proper boating safety includes knowing how to swim. Local organizations, such as the American Red Cross and others, offer training for all ages and abilities. Check to see what classes are offered in your area.
  9. Take a Boating Course. Beginning boaters and experienced experts alike need to be familiar with the boating safety rules of operation. Boater education requirements vary by state; however, some require validated completion of at least one boating safety course. Regardless of your individual state’s requirements, it’s always important to be educated and prepared for every circumstance that might arise. You can learn boating safety rules by taking a local community course or online course to educate yourself.
  10. Consider a Free Vessel Safety Check. Take advantage of a free vessel safety check from the US Coast Guard. They offer complimentary boat examinations to verify the presence and condition of certain safety equipment required by state and federal regulations. They’ll provide a specialist free of charge to check out your boat and make helpful boating safety tips and recommendations. They also offer virtual online safety checks as well.
If a tree falls and hits your house, are you covered? The short answer is yes. The coverage is quite straightforward: if a tree hits a home or other insured structure, such as a detached garage, standard homeowners insurance policies provide coverage for the damage the tree does to the structure and the contents in it. This includes trees felled by wind, lightning, or hail.
It does not matter whether or not you own the tree; if it lands on your home, you can file a claim with your insurance company. After a hurricane or windstorm, trees, shrubs, and branches can become projectiles capable of traveling significant distances and can cause considerable property damage. In most cases, an insurance company will not spend time trying to figure out where a tree or other item originally came from.
In some situations where the felled tree was located on a neighbor’s property, the policyholder’s insurance company may try to collect from the neighbor’s insurance company in a process called subrogation. This sometimes occurs if the tree was in poor health or not properly maintained. If the insurer is successful, you may be reimbursed for the deductible.
If a tree hits an insured structure, such as your house or garage, there is also coverage for the cost of removing the tree, generally up to about $500 to $1,000, depending on the insurer and the type of policy purchased. If the fallen tree did not hit an insured structure, there is generally no debris removal coverage. However, some insurance companies may pay for the cost of removing the felled tree if it is blocking a driveway or a ramp designed to assist the disabled.
Standard home insurance policies also provide coverage for damage to trees and shrubs due to fire, lightning, explosion, theft, aircraft, vehicles not owned by the resident, vandalism, and malicious mischief. Coverage for these disasters is generally limited to up to 5 percent of the amount of insurance on the house’s structure. Generally, most insurers will limit about $500 for anyone tree, shrub, or plant. Trees and plants grown for business purposes require a separate business insurance policy.

Protection Beyond the Usual
While it’s easy to assume that only a rich person could need that much insurance coverage, you’d be surprised at how important an umbrella policy can be for an average member of the middle class. For example, if you have a car insurance policy with liability coverage, you may think you have enough protection in case of an accident. But a lawsuit could quickly exceed the $100,000 or $300,000 insurance payout.

An umbrella policy provides an additional insurance layer, typically $1 million or $2 million, above your auto insurance and your home insurance liability coverage. Consider the following scenarios where an umbrella policy would have been helpful:

  • A $1.2 million settlement in New Jersey where an underinsured driver hit a policeman who was completing paperwork at a traffic stop. The driver had to pay legal fees for his defense as well as the settlement.
  • $1.76 million was awarded to a mother and her 8-year-old child in Florida after a wave runner accident injured both of them. The mother needed corrective surgery after the initial injuries were treated.

Although 85 percent of umbrella insurance claims are related to car accidents, the policies offer protection against accidents that occur at your home, too. For example, if someone falls down your stairs and sues you, or your balcony collapses during a party. Many people opt for an umbrella policy because they have a pool or a trampoline on their property and fear the consequences of a child getting injured.

Then there’s coverage for incidents you may not have even considered, such as accidents while you’re driving in another country or while you’re on vacation and have rented a boat or Jet Ski.

Another important feature of these policies is protection in a lawsuit against you for slander or defamation of character or for decisions you might have made as a volunteer member of a nonprofit board. If you regularly blog about controversial topics or rant on Facebook, an umbrella policy might be a good idea to protect your assets from a litigious individual who believes you’ve damaged their reputation.

That may sound unlikely, but it’s not unheard of. In 2009, a high school student sued four other students and their families for $3 million because of derogatory comments the other students made about her on Facebook. While the lawsuit was eventually dismissed, reaching that verdict took two years and required considerable expenditures by the families. An umbrella policy can cover expenses related to such lawsuits.

You Have More to Protect Than You Think
You may be assuming that if you don’t have $1 million to lose, you don’t need an umbrella policy. Unfortunately, if you are sued by someone who falls down the stairs at your home or whom you injure in a car accident, you can be sued for more than just what you have in the bank.

Your retirement funds, investments, savings, and even your future earnings are at risk if a judge allows someone to garnish your wages to pay off a settlement. In some states, the equity in your home can be part of the judgment, and you would be forced to sell your home to pay someone who sues you.

If you own a house and have a retirement account or other investments, an umbrella policy of $1 million or more should be part of your financial plan. Most insurance companies offer these plans in increments up to $5 million, and some go up to $10 million.

Insurance companies require specific levels of liability coverage on your auto and home insurance policies before they will approve an umbrella policy, typically:

  • $300,000 per occurrence for personal liability, bodily injury, and property damage liability on your homeowners insurance policy
  • $250,000 per person for bodily injury and $500,000 per accident on your car insurance policy
  • $100,000 per accident for property damage on your car insurance policy

The average cost for a $1 million policy is $200 annually — which you might find a relatively low price for the peace of mind and security it offers

If any of the following incidents were to happen, do you know if your homeowners insurance would pay the full claim, part of the claim, or deny it completely?

  • Your golf clubs are taken out of your car.
  • Your expensive digital camera is dropped and broken.
  • Your home-office computer is ripped off.

Unfortunately, with just a standard homeowners insurance policy, the likelihood of your full claim being paid is not great.
While your homeowners insurance policy does provide some coverage for valuable items, it is usually limited in the types of covered claims and payment amounts.
To have full coverage for the incidents above, you would need to purchase a Personal Articles Floater. A personal articles floater provides coverage for possessions with higher monetary values like:

  • Cameras (video or still) and related equipment
  • China and crystal
  • Firearms
  • Golfer’s equipment
  • Jewelry
  • Musical instruments
  • Personal computers
  • Silverware
  • Works of fine art

It will also provide some additional coverage for things like mysterious disappearance and breakage. And the best part is that this type of policy isn’t costly at all.

Why should I consider a Personal Articles Floater?

Benefit 1: A personal articles floater will provide higher limits on your valuables.
Standard insurance policies limit coverage for the items listed above at anywhere from $500 to $1,500 depending upon the item. In many cases, that may be sufficient; however, if the item is rare or valuable, the regular might not be enough.

One of the benefits of a personal article floater is the freedom you have in selecting your limits.  Rather than predetermined limits, insurance companies are more willing to provide higher limits (as long as you can provide proof of said value).

Benefit 2: Claim payments are facilitated more proficiently.
Claims for personal articles floater usually paid one of two ways:

  1. Replacement Cost: Your insurance will pay the necessary amount to repair or replace your item with another one of like kind and quality.
  2. Agreed Value: The insurance company will use an “Agreed Value” limit for the item. This means that, in the event of a covered claim, your insurance company will pay you the amount listed on the policy.

An agreed value limit is great when you’re insuring items like jewelry, fine art, antiques, and other unique items because it means if you suffer a loss on a covered item, you will not have to negotiate a settlement price with the insurance company.

Benefit 3: A personal articles floater provides expanded coverages.
A standard homeowners policy does not include some vital coverages for rare or valuable items.  For example, a personal articles floater can provide coverage for “mysterious disappearance” or “breakage.” So if you were to lose a valuable piece of jewelry or accidentally break some fine china, your policy would pay the associated claim.

Benefit 4: Coverage can be expanded worldwide.
While most homeowners policies will typically only cover items located on the premises listed within the policy, personal articles floaters will provide coverage anywhere in the world.

For example, if you lost your expensive camera while on vacation, your policy would pay for a replacement.

Benefit 5:  Most personal articles floaters do not have a deductible.
A standard homeowners insurance policy will usually include a $500 to $1,000 deductible. A personal articles floater is different; many of them actually remove the deductible removing any out-of-pocket expenses as the policy owner.

Some Tips when Adding this Coverage

  1. Make sure to keep a detailed list of the items listed on the policy, including copies of the appraisals.
  2. Photograph each piece of your collection and store the photos in a safe place. This will make it easy to list each item on your claim report if your entire collection is stolen or damaged.
  3. If you have several high-value items, it may be in your best interest to store them in a safe deposit box or install a security system in your home. Doing so will help discount the premiums on your policy as well.

How Much Does the Coverage Cost?
Now the big question, right? How much does a policy of this type of cost?

Personal article floaters are actually much cheaper than you think, given the coverage they provide. The increased cost can be anywhere from $20 to $2,000 annually, depending upon the type of items insured and their associated value.

*The above information is to be used as guidance only and should not be considered definite in any particular case. Every policy is different, and you need to read through your policy and consult with your agent to determine how your coverage will respond.  This article cannot analyze every possible loss exposure and exception to the general guidelines above.

Exclusions listed in a personal auto insurance policy vary depending upon what state laws permit and then your car insurance company’s guidelines.  When something is noted as excluded from your policy, it means that your policy won’t cover it.

Exclusions can be associated with a person, property, location, peril, or specific situation.

These limitations to your coverage are important to know so that you don’t end up in a situation where you find out after an auto accident that you have no coverage — or have voided your policy.  (Remember, if your policy doesn’t cover you, then you’ll be stuck paying out-of-pocket usually.)

The most common exclusion regarding a person is a named driver exclusion.  With this, you and your insurer agree to exclude a specific person from your policy’s coverages.  This driver isn’t rated on your policy, and in return, your insurer won’t cover the individual if found driving your car.

Here’s a look at some of the most common exclusions found in the different parts of a personal auto insurance policy.

Bodily and property damage liability exclusions

Most policies plainly state they don’t provide liability coverage:

  • If an insured has intentionally caused injury or property damage.
  • For property damage to property owned (or being transported) by the insured.  (So if you hit your own car, you can’t make a liability claim)
  • For property damage to property that is rented, used by, or in the insured’s care.
  • For bodily injury to the insured or any insured family member residing in the insured’s household. (Some states only allow the policy to reduce the bodily injury limits for family members to the state’s minimum)
  • For liability arising out of the vehicle’s ownership or operation being used for “livery conveyance.”   This means using your vehicle to transport goods or people for payment – so don’t use your car as a taxi or delivery service.   So, don’t use your car for delivering pizzas, or you may void your coverage.

In general, using your vehicle for business purposes can be a no-no according to your liability policy.  For example, it may say that the business of:

  • Selling, repairing, servicing, storing, or parking vehicles (other than your insured vehicles) is not covered by your liability or physical damage coverages.
  • Maintaining or using any vehicle that the insureds are using to engage in business –other than farming or ranching – may not be covered.  (If you are using your vehicle for business, see about a business-use or commercial policy)

Catastrophic events or exposures are usually marked as excluded as well.  This can include items such as bodily injury or property damage resulting from:

  • Nuclear exposure or explosion – including the resulting fire, radiation, or contamination.
  • Bio-chemical attack or exposure to biochemical agents as a result of an act of terrorism.
  • War (declared or undeclared)

Vehicles that are excluded from coverage (or deemed unacceptable to cover for either liability or physical damage coverages) vary, but the list may include:

  • One with less than four wheels
  • Designed for use principally off public roads or not registered for use on public roads
  • Any vehicle owned by you or a family member but isn’t listed as insured on your policy.
  • Any vehicle furnished for your regular use but isn’t listed as insured on your policy.
  • Any vehicle used to compete in a race or practice or preparing for any prearranged or organized racing or speed contest.

Some insurers have amended policies to include an exclusion for any operated, maintained, or used vehicle as part of a personal vehicle sharing program.  So, loaning your vehicle out for a car-sharing service could mean you have no personal coverages.

Physical damage coverage exclusions

Collision and comprehensive coverage are the physical damage coverages offered by auto insurers. At the same time, liability insurance covers those that you damage, collision, and comprehensive cover your own vehicle if it’s damage.
Exclusions under this portion of the policy can be similar in many ways to the restrictions listed in your liability portion of your policy.  Typically, collision and comprehensive coverage exclusions include loss or damage due to:

  • Wear and tear
  • Freezing
  • Mechanical or electrical breakdown or failure
  • Road damage to tires
  • Catastrophic events – radioactive contamination, nuclear weapon discharge, war, etc.
  • Destruction or confiscation by government or civil authorities
  • Using your vehicle for livery or delivery purposes
  • The vehicle being used for racing purposes
  • Intentional damage
  • The vehicle used in personal car-sharing programs (some insurers)

Personal items that are damaged in your vehicle or stolen from it aren’t covered, and most policies specifically mention the exclusion of coverage for losses to:

  • Any electronic equipment that is not permanently installed.
  • Custom equipment (or is covered to a specific minimal amount — such as $2,000) unless you’ve added custom parts and equipment endorsement to your policy.

If a vehicle is excluded from liability coverage, then typically, it’s also unable to obtain physical damage coverage.   However, there is some vehicle that insurers allow to obtain liability but not collision and comprehensive — such as vehicles with a salvage or rebuilt title.

Medical payments and uninsured motorist bodily injury

Medical coverages you can purchase for yourself as part of an auto insurance policy have exclusions as well.  Typically, they include injuries sustained in the circumstances mentioned above, such as catastrophic events, racing or livery service, as well as situations such as:

  • Injured on a motorized vehicle having fewer than four wheels
  • Injured while using the vehicle as a residence
  • Injuries that workers compensation benefits should cover because occurred during the course of work