Question:  What does an auto policy mean when it says Exclusion of Work Loss (included) in policy? Some quotes say named insured and some say both named insured and resident relatives.

Answer: An auto policy that says “exclusion of work loss (included)” in policy would mean that the car insurance policy that you have or are purchasing has excluded coverage for lost wages. Typically, this exclusion is under the personal injury protection (PIP) portion of a policy.

For example, in Florida you are required to have $10,000 of PIP and part of benefits that come with PIP coverage is a percent of your lost wages (income). A typical FL PIP policy pays 80% of medically necessary expenses, 60% of lost wages, and 100% of replacement services and $5,000 for death benefits.

You can amend or extend your PIP to increase medical expenses to 100% and lost wages to 80% or increase your minimum limits from $10,000 to $20,000 or more. You can also exclude some coverages and choose a deductible amount for PIP to reduce the cost of your PIP coverage.

Your car insurance application may give you an option under the personal injury protection insurance coverage in which the named insured may elect a deductible and to exclude coverage for loss of gross income and loss of earning capacity (lost wages). These elections apply to the named insured or named insured and all dependent resident relatives. If you choose these options, you’ll pay less for that portion of your car insurance.

The main reason to exclude coverage for work loss is to lower your rates. If your policy says exclusion of work loss (included), but you want to have wage loss benefits included, contact your insurance company right away to adjust the coverage.

If you chose to only exclude the named insured, then the policyholder (that’s you unless you’re on someone else’s policy) is the only one with this work loss exclusion. If you choose named insured and resident relatives, then that typically means anyone in your household.

The definition of a resident relative varies, so check with your insurer to find out how they define this term. In Florida, it usually means any relative by any degree of blood or marriage that resides at the home of the named insured. This includes a resident relative residing temporarily somewhere else, such as a student away at college.

In general, it’s not advisable for most people to choose the loss wage exclusion. If you are in a serious accident and can’t work for a while, excluding loss wages from your PIP coverage could put you in a tough situation.

Rather than dropping coverage, shop around to compare car insurance quotes in your state and find the best rates.