If you are like a number of car insurance consumers, you may buy coverage but not fully understand what you are getting for your premium payments. When you buy insurance, you are entering into a legally binding contract with the company. The insurance company agrees to provide coverage up to the policy limit and under the terms stated in the contract, and you agree to pay a certain amount in premiums for the coverage.
As long as you have held up your end of the contract and made your payments, the insurance company is legally obligated to pay out when you make a claim. The insurance company can refuse to pay a claim if the loss is not covered in the policy language, so you need to take the time to review your policy carefully so that you understand exactly what you are covered for and what the policy exclusions are.
The exclusions are circumstances where the insurance company will not pay for a claim. No car insurance policy is going to provide you with coverage for all perils. Each insurance company writes its own policy language, and the exclusions can vary depending on the provider.
Standard exclusions include circumstances where the policyholder has committed fraud when making the claim. If you reported your car as being stolen but you were involved with the theft, your insurer will not pay your claim. Staging an accident to collect monetary damages is another example of car insurance fraud.