Question:  What does an auto policy mean when it says Exclusion of Work Loss (included) in policy? Some quote as Named Insured and some are 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.

So 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. A premium reduction will result from these elections.

Thus, to get a lower rate of insurance you can choose to exclude coverage for work loss. If your policy says exclusion of work loss (included), then it would appear that you choose to save by not having work loss as a benefit of your policy.

If you chose to only exclude the named insured, then the policyholder would be 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 for resident relative varies so you can check with your insurer to find out specifically how they define this term. In Florida it usually means any relative by any degree of blood or marriage and usually 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 genera,l it is advised that the name insured not select the loss wage exclusion if the named insured or dependent resident relatives are employed since loss wages will not be payable in the event of an accident. If you were to be in a serious accident and not able to work for a while excluding loss wages from your PIP coverage could put you in a tough situation without any income coming in.

If your agent is not able to explain your policy terms and coverages to you, contact a agent and they can explain not only coverages and policy terms but also how to compare quotes in your state and find the best rates.