You need auto insurance not just because of legal requirements, but also because the coverage will come to your rescue if you suffer a car-related loss. However, there are car-related damages that even your auto insurance policy won't compensate for. Below are some of these auto insurance exclusions.
Wear and Tear
Auto insurance only covers your car for accidental damage, not wear and tear. All car parts, even those of the highest quality, wear out eventually. Insurance doesn't cover such certainties. Therefore, if your brakes are rated to last for 50,000 miles and they fail after that long, don't expect compensation from the insurance company.
Your insurance company won't compensate for deliberate or intentional damages to your car. For example, if you receive some bad news and kick your car in anger or frustration, the insurance company won't pay for the body repair since it was necessitated by intentional acts on your part.
Your personal auto insurance coverage doesn't cover racing-related damages. It may pay for damages or injuries you cause to other people, but it won't cover the damages or injuries you may incur. For example, if you crash your car while street racing, you have to use your personal funds for the ensuing repairs.
Before you modify or customize your car, you should call your insurance agent to get authorization or confirm that your policy will cover the modifications. Some modifications increase the value of a car, while others increase the risk of an accident. For example, raising your car may increase its risk of rollover accidents. Thus, auto insurance companies don't extend coverage to unapproved modifications.
Assuming you have the right coverage, your insurance will replace your car if the car is stolen or if the car is written off after an accident. However, the coverage won't help if you lose the car via lawful seizure. For example, if you owe someone money and the court allows them to seize your car, auto insurance won't replace the car.
Damages from Commercial Use
Lastly, your personal auto insurance will also not pay for damages arising out of commercial activities. Say you turn your personal car into a delivery van for your company. If the car gets in an accident on the way to a client's home, your personal coverage won't pay for the repairs.
Depending on the exclusion, you may be able to get coverage adding a rider to your policy or buying separate coverage. Some exclusions, however, cannot be covered by any insurance. Talk to an auto insurance agent to help you assess whether you can get coverage for some of the exclusions above.