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Vehicles your insurance company won’t cover


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Question: Can I insure any vehicle with a personal auto insurance policy, or are there certain vehicles that are found unacceptable to car insurance companies?   If so, can you give me a list?

Answer:   Most vehicles that you can buy off your local car dealer’s lot can be insured under a personal auto insurance policy.  If you change the vehicle or use it for something other than personal use, then your car insurance company may refuse to insure it.

For instance, if you begin to use the vehicle for work purposes, you’d normally have to get a business-use or commercial policy.

If you customize your car a little, then you may need to buy additional coverage (custom parts and equipment coverage).  If instead you substantially alter the vehicle, then your personal policy may be voided – thus, you’d need to seek specialized coverage.

If you buy a classic car, then instead of a personal auto policy you’d want to find a collectible car specialist that allows you to obtain a policy with an agreed or stated value. (See “Insuring your keepsake car.”)

A very expensive car will usually require custom coverage. (See "Exotic or expensive? Check your premium.")

What to look for

Underwriting rules vary by car insurance company based on internal rules (and governed by state insurance laws).  Unacceptable vehicle guidelines can vary not only from one insurance company to the next, but the same car insurance company may have different rules in different states. 

Some state department of insurance offices have lists of vehicles that have been found difficult to insure -- due to unfavorable loss experience, high cost of repairs or limited availability of parts or high theft records.  (See New York’s list here).

Below is a very general list of the types of vehicles that can be found unacceptable risks under personal auto insurance policies. 

  • Vehicles without a valid garaging address
  • Vehicles with a principle garaging address outside of the state in which the person primarily lives (and has their vehicles registered).
  • Vehicles not registered to the policyholder (policyholder doesn’t have an insurable interest in it)
  • Vehicles used for racing
  • Vehicles not registered for street use
  • Vehicles with altered suspensions (some policies are specific and say raised or lowered more than 3 inches from factory specs)
  • Vehicles that have been modified mechanically or structurally and whose appearance or performance has changed from its original design
  • Vehicles used for delivery (or pickup) of goods
  • Vehicles used for livery services (limousine or taxi service)
  • Vehicles used for commercial purposes
  • Vehicles owned or leased by a partnership or corporation
  • Vehicles with logos or advertising on them
  • Vehicles available to multiple users, such as pooled vehicles used for sales, farming, or artisan use
  • Vehicles used for emergency services
  • Vehicles with snowplowing equipment
  • Vehicles with a load capacity greater than a certain stated amount (varies by insurer, can be one ton or two tons or greater)
  • Flatbed trucks, step vans, panel vans or cut-away vans.
  • Recreational vehicles, such as motorhomes, travel trailers and boats.
  • Vehicles designated for off-road use
  • Vehicles leased or rented to others
  • Vehicles regularly operated by non-listed drivers
  • Vehicles rented or leased to other operators by the insurance applicant/policyholder
  • Vehicles equipped with cooking or catering equipment or bathroom facilities.
  • Special interest or exotic vehicles such as Ferrari or Lamborghini
  • Vehicles that are custom built, limited production, kit cars, replicas, show cars or antiques
  • Vehicles with actual cash value (ACV) of over a certain stated amount, such as $150,000 (some insurers have a table they go by that lists the maximum ACV by model year)
  • Grey market vehicles (vehicles manufactured for use in a foreign country and then imported to the U.S. for use)
  • Vehicles with less than four wheels, such as motorcycles, mopeds, motor scooters, go-carts or similar vehicles
  • Low-speed vehicles that have a top speed of 55 mph or less
  • Vehicles with a branded title -- rebuilt, junked or salvage title  (Although, some insurers will allow this)
  • Vehicles with existing damage that makes them illegal or unsafe to operate on the roadway
  • Vehicles with a model year prior to a certain year (e.g. 1988 may be listed in 2013 because an insurer may only write policies for cars built within the last 25 years).  
  • Some companies that will offer liability for older cars but not physical damages of collision and comprehensive for cars over a certain age, such as 15 years or older.

Whatever your vehicle is, new off the lot or extremely unique; we’d recommend you research your insurance options before purchasing it. 

Comparison shopping for car insurance will allow you to find out if a specific car is insurable and how much you should budget for your auto insurance premium.  If you’re diligent and look for a specialty car insurance carrier, if necessary, you should be able to insure even the most unusual vehicle.

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