Posted on 10/27/2023 11:16:13 AM PDT by vespa300
To demonstrate how idiotic this situation is …
Imagine this accident didn’t involve just a $5,000 property damage claim, but a legitimate $500,000 personal injury claim. And imagine being the injured party who doesn’t have $500,000 of insurance coverage, and who learns that the insurance company for the liable party has decided to retroactively cancel the policy to avoid paying the claim.
"Well...there's the tire guy down at Firestone that pulled my car into their garage. Oh and...the valet at the Hilton in Tampa. Then, there's that carjacker down on 5th & Vine St."
He needs an attorney. This is classic post-claim underwriting.
Insurance companies are not allowed to do this in my state.
I am a Washington State attorney that regularly sues insurance companies.
If this had happened in my area, I would gladly represent him on a contingent fee basis that puts all of the risk of paying the attorney’s fees on the insurer. We would be asking for damages for emotional distress, and treble damages. Money for him; money for me.
I find it hard to believe California’s laws in this regard are not similar to my state’s.
Insurance companies should not be allowed to charge for unlicensed residence of a house. Just because my kids might be of driving age doesn’t mean they drive. It is fine for the insurance company to not cover if they turn out to be driving and cause an accident. But don’t penalize insurer because of their family.
I am guessing there is more to this story.
The greatest value to your insurance is that your carrier has your back in liability situations. The legal bills would sink all but the rich without such protection.
The cost of that benefit is honesty. Every state differs in terms of insurance regulations.
All I can say is that my brief segue into P&C insurance was EYE-OPENING. This article merely scratches the surface.
Anyone reading his who has State Farm: You have no idea how compromised you are (they are the WORST when it comes to backstabbing, AND their own policy is that their agents are FORBIDDEN to offer clients claims advice).
>>>I find it hard to believe California’s laws in this regard are not similar to my state’s.>>>>
Yeah, I thought the same thing. If anything, California would be the most consumer friendly in cases like this.
I am an expert on this topic:)
In most states any driver in the household or any driver using the vehicle with permission are automatically covered. Excepted drivers are drivers specifically excluded via a form the state insurance board promulgates. For example, in Texas, this form is called a 515A:
https://www.snapmga.com/downloads/en/en_texas_exclusion_of_named_drivers.pdf
Besides excluding the driver as I describe above there is a policy form called a “Named Driver Policy”. This is what it says, only the drivers specifically listed on the policy are covered. Here is how it works in Texas starting in 2020:
“A named driver policy is a car insurance policy that only provides coverage for drivers specifically named on the policy and not for all individuals residing in the insured’s household. House Bill 259 prohibits insurers from delivering, issuing for delivery, or renewing named driver policies on or after January 1, 2020. Instead, insurance companies can exclude family members and other household residents from coverage only if those persons are specifically named and excluded on the policy. When you purchased your Texas car insurance policy, you had two options: you could cover everyone who uses your car or opt for a more restricted definition of who is covered in exchange for a lower price. Many people chose the second option to save money”.
I’m shocked that California is “behind” Texas in doing away with named driver policies because they are consumer adverse, especially with folks who are not primarily English speakers. I’m very shocked that the liberal CA dept. of insurance didn’t side with the consumer. IMO this situation would not hold up in court because I’d guess that the policy that was issued has nothing regarding declining coverage for non-licensed individuals in the household. Would this same company deny coverage because there was a newborn in the household?
This claim should be paid.
>>>I assume the idea, is that even if not licensed there is a risk that they could take the car without the parents even knowing.>>>
That would be my guess. A risk they have to factor into writing and pricing the policy even if the person doesn’t drive, have a license, etc.
Years ago I worked for an auto insurance company. A female customer called just to let the company know she’d changed her name because she got married. They immediately upped her rates because now her husband had access to her car. She said, “My husband never drives my car,” but it didn’t matter. She still had to pay more. She raised quite a stink and accused the company of sexism. Since men didn’t change their names when they got married, the company would not necessarily know if they got married and their wives had access to their cars.
Thanks, good info especially since I live in Texas. I too am shocked this is a California thing.
"All right listen closely I'd like to help you but I can't. I'd like to tell you to take a copy of your policy to Norma Wilcox on the third floor but I can't. I also do not advise you to fill out and file a WS2475 form with our legal department on the second floor. I wouldn't expect someone to get back to you quickly to resolve the matter. I'd like to help but I can't."
“or pay a bit more to have an independent agent”
One of the biggest misconceptions about insurance is that the “agent” is YOUR agent. No, he’s ALWAYS the Company’s agent. He is NEVER YOUR agent.
What you refer to as an “independent agent” is actually an independent BROKER. The BROKER is also an agent of the insurance company, but only for the limited purpose of being able to bind coverage, that is, sign you up for the insurance.
Even then, in that narrow capacity, he is the Company’s agent.
Otherwise your advice is spot on.
Another thing, insurers around the country are getting hammered by the dramatically escalating cost of vehicle repairs. They filed their rates in the past based on previous losses then when all the supply chain issues started, and inflation hit and that dramatically increased the cost of claims they were caught flat footed. Many are bleeding red all over the ground. Some of this was self-inflicted in some states because the insurers did not have a good hand on underwriting certain vehicles. For example, they may have insured a 2023 Ford F-150 XLT and the agent “used” a ACV value of $45,000.00 but the vehicle was actually a 2023 Ford F-150 Raptor with an ACV of $95,000.00.
Another option this fellow might have would be to go after the agent’s E&O coverage.
Basically, the solution if all the details in this story is accurate is a lawyer who can walk and chew gum at the same time:)
“It costs, on average, about $10,000 to initiate a lawsuit. The better approach would be to contact the Insurance commission. I’d also give a call to my repetitive.”
California imposes punitive damages on insurance bad faith. So there might be an attorney who would take it on the cuff.
So, what happened? Did she win?
The purpose of car insurance is to provide proof of insurance coverage so you can show it to the police if you get pulled over.
damn... i park outside the garage... the whole neighborhood has access to my truck
Tomato, tomahto.
The terms vary, but elaboration appreciated.
10 year-olds have been caught driving their parents’ cars.
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