7.2 Exclusions and Part E Duties After an Accident

Part D Exclusions

The Part D insuring agreement is broad, so the exclusions do the heavy lifting. Memorize these categories — exam writers favor them because they separate a covered claim from a denial.

Maintenance and predictable losses

Part D does not pay for wear and tear, freezing, mechanical or electrical breakdown or failure, and road damage to tires. These are maintenance exposures, not fortuitous accidents. The freezing exclusion is set aside if the loss results from theft.

Use and ownership exclusions

• Loss to a vehicle used as a public or livery conveyance (taxi, ride-share for hire) — a major trap as gig driving grows.
• Loss while the covered auto is in the business of selling, repairing, servicing, storing, or parking vehicles (garage operations belong in a commercial policy).
• Government destruction or confiscation, war, nuclear hazard, and radioactive contamination.

Equipment caps

Loss to electronic equipment that reproduces, receives, or transmits audio, visual, or data signals and is not permanently installed, and to custom furnishings in a pickup or van, is limited (a common stated cap is $1,500 for non-original electronic equipment) and otherwise excluded unless added by endorsement. Tapes, records, discs, and other media used with such equipment are excluded entirely.

Other notable Part D exclusions

• Intentional damage by or at the direction of an insured (the fortuity requirement).
• Loss to a non-owned auto used without a reasonable belief the insured is entitled to use it.
• Loss to equipment designed for the detection or location of radar or laser speed-measuring devices.
• Loss to a camper body or trailer not shown on the Declarations (with limited exceptions for newly acquired items).

Part E: Duties After an Accident or Loss

Part E lists the conditions the insured must satisfy after a loss. These are conditions precedent — the insurer's duty to pay is suspended until they are met, and a material breach can defeat the claim.

General duties (all coverages)

1. Prompt notice to the insurer of how, when, and where the accident or loss happened, with names and addresses of injured parties and witnesses.
2. Cooperate with the insurer in the investigation, settlement, or defense of any claim or suit.
3. Forward promptly any legal papers, summons, or notices received.
4. Submit, as often as reasonably required, to physical exams by physicians the insurer chooses (for bodily injury claims) and to examinations under oath.
5. Authorize the insurer to obtain medical and other relevant records.

Additional duties for Part D physical damage

• Take reasonable steps after a loss to protect the auto from further loss (the insurer will pay reasonable expenses to do so).
• Notify the police promptly if the covered auto is stolen.
• Permit the insurer to inspect and appraise the damaged property before repair or disposal.

Exam trap: A duty to notify the police applies specifically to theft. Failing to allow inspection before repairs, or refusing an exam under oath, gives the insurer grounds to deny that claim.

Why the duties matter

The Part E duties are written as conditions, so they are read alongside the policy's general conditions. The insurer's promise to pay is conditional on the insured's performance. Courts generally require the insurer to show it was prejudiced by late notice before denying, but a clear refusal to cooperate, to submit a sworn proof of loss, or to permit appraisal is treated as a material breach.

Practical sequence after a covered loss:

1. Stop further damage and secure the vehicle.
2. Call police if theft, vandalism, or injury is involved.
3. Report to the insurer promptly with full details.
4. Preserve the vehicle for inspection; obtain estimates but do not repair until cleared.
5. Cooperate with the adjuster, recorded statement, exam under oath, and proof of loss.

Exclusion Scenario Drills

The livery exclusion is the modern gig-economy trap: a driver carrying passengers for a fee loses Part D (and Part A) coverage unless a ride-share endorsement is purchased; an ordinary car-pool cost-sharing arrangement remains covered.

Duties as Conditions Precedent — Sequence and Consequences

Part E duties are conditions precedent: the insurer's obligation to pay is suspended until performed, and a material breach (refusing an exam under oath, blocking inspection before repair, or failing to give notice) can defeat the claim. Many states require the insurer to prove it was prejudiced by late notice, but outright non-cooperation needs no prejudice showing.

Step-by-step after a covered loss:

1. Protect the vehicle from further damage (the insurer reimburses reasonable steps).
2. Notify the police promptly if the auto is stolen (a theft-specific duty).
3. Report to the insurer with how/when/where, plus injured-party and witness details.
4. Preserve and permit inspection/appraisal before repairing or disposing.
5. Cooperate: recorded statement, exam under oath, sworn proof of loss, and medical authorizations for BI claims.

Exam trap: the notify-police duty is tied specifically to theft; failing to allow the insurer to inspect before repairs, or repairing first and seeking reimbursement, jeopardizes the physical-damage claim because the insurer loses its right to verify the loss.