Coverage on unlicensed drivers?

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PostPosted: Mon Jun 07, 2010 7:06 pm   Post subject: Coverage on unlicensed drivers?  

During the last three weeks, we have had two accidents invoving unlicensed drivers. (Both times their fault). The one I am most concerned about is the one involving my daughter. This uninsured driver was coming from the opposite direction and turned in front of her causing $5k worth of damage to her new car. She asked if she should call the cops, he said they could just exchange info, because if she called, he would be going to jail. She called the cops. He called his sister who owned the car, who got there before the cops. The sister tried to get my daughter to say that the sister was driving because "she had full coverage". Insurance coverage was paid for by another brother, but the sister owns the car. Their insurance company says that he has no coverage, and that my daughter has to turn it in to her insurance company. They say he didn't have permission to take the car. He certainly didn't hotwire it, and the sister never said anyting about him not having permission, and to the best of my knowledge, he has not been charged with stealing the car. From what I hear he was out several daysl ater - driving. (He has at least 13 priors unlicensed.) My daughter just graduated, worked really hard for her car, and had to start her new job the next day in a borrowed clunker. I know that life is not fair, but isn't there some remedy for this? Will her insurace rates go up if her company has to pay? Any info or advice you can give will be greatly appreciated. We live in Missouri if that matters.

chandervan
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PostPosted: Mon Jun 07, 2010 7:37 pm   Post subject:   

A few things....



I don't know all the details about how he got the car, if he's driven it in the past, if he's living with her, etc. Her insurance company probably knows so they may have more info.



You mentioned some _very_ good points so I think you understand the situation. It's _very_ difficult to deny a claim for non-permissive use unless the vehicle was stolen by someone the owner does not know. In this case he knows the owner and appears knows the owner well enough to have access to her car keys. He also.... has access to her car keys. If he stole the vehicle she should have filed a theft report. She did not. Permissive use is not always the same thing as verbally giving someone permission to use your vehicle. If the person has used the car in the past, if the person has access to the keys, if no police report is files, _all_ of these things indicate permissive use. In this case everything is just stacking up. Courts don't let owners get away with liability just by saying the person did not obtain their permission at that given moment to do that certain thing. I have very little doubt that a judge would find that the owner _is_ liable in this situation.



Has the carrier sent you a written denial? If not, the claim has not been denied. From what you mention it appears that the other carrier is denying coverage to the driver and denying liable upon their insured. They'd still be providing their insured coverage... just denying that their insured is liable.



Here is what I think you should do... if no denial from the carrier you should call them and point out the following: Mention all the facts you mentioned here. Explain that no judge is going to find their insured not liable due to _all_ of those reasons. Just one would probably be good enough but there are _many_ reasons. You can also mention if a denial is issued you will file suit against the owner and drivers (many states will allow you to file against the owner as well as the driver but some will only allow against the driver... this does not matter. You write down both names and have them both server and let the judge do his/her thing). The insurance company will then need to provide a defense which will cost a lot of money and you will probably end up wining any way. The kicker that you want to mention is that the owner (their insured) is going to make a _terrible_ witness. She wants her brother to get coverage for this accident under her policy. That is not going to happen if she states he "stole" the car. He should get coverage is she changes her story slightly and admits that he has access, has driven it before, etc (which is probably true anyway). So their own insured is going to go against them so the claim can be paid and her brother does not get a judgement against him. You could even go as far as calling the owner and simply explaining this to her. Let her do what she feels is right.



I mention all of this as I just see no reason why the carrier is trying to deny liability in this situation (if they are denying liability and not coverage... there is a difference). They are just not going to win.



Note: I see this accident happened in MO and from others have posted I think the owner can be held liable in addition to the driver. Two other posters handle claims in MO and I'm sure they will post as well.



IMHO you have a _very_ good liability case against the owner and I don't think the carrier is doing themselves any good by denying liability (different then denying coverage).

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PostPosted: Mon Jun 07, 2010 11:38 pm   Post subject: accident  

OMG!! Sounds like a mess!! I know a bother/sister that was in this similiar situation. The car and Insurance was in HER name. HE took the car (no DL) and 'totaled' the car. SHE said HE "stole the car." It turned into a MAJOR fiasco!!

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PostPosted: Tue Jun 08, 2010 2:02 am   Post subject:   

Missouri does allow the owners and drivers to both be held liable for an accident...



Something else to think about,

Quote:
Insurance coverage was paid for by another brother, but the sister owns the car.
I'm wondering if the this other brother (lets call him the 'good' brother), is just paying the bill for his sister, or if he also owns the vehicle, and/or has the insurance in his name, (he's the named insured sister is a listed driver)...Personally I'd bring/name him as well....



Quote:
They say he didn't have permission to take the car. He certainly didn't hotwire it, and the sister never said anyting about him not having permission, and to the best of my knowledge, he has not been charged with stealing the car.
AND don't forget this part of your story! and make sure the carrier KNOWS about this!!!
Quote:
He called his sister who owned the car, who got there before the cops. The sister tried to get my daughter to say that the sister was driving because "she had full coverage


Now, if you stole your sisters car, she's gonna be pissed.. are you really going to :



A) call her first!

B) she comes running, gets there BEFORE the cops, and asking your daughter to give a false statement to the police that HELPS her brother the "thief" !? NOT Rolling Eyes



Let me give you a couple of direct quotes from a MO policy...(most policys in this state will be similar if not exact).



(general) Definitions:



GENERAL CONSENT means the authorization of the OWNER of an auto for another to use it on eone or more occasions without the necessity of obtaing permission for each use. GENERAL CONSENT can be expressed or implied..

---------------------

PERMISSION means the prior authorization of the owner of an item of personal property for another to use it on a specified occasion and for a specified purpose. The specified occasion can be more than one day in duration. PERMISSION exists only on that specified occasion and only while the item is being used for the specified purpose. PERMISSION can be expressed or mplied. An individual who is expressly authorized to use a vehicle by a person in prossession of that vehicle will be treated as having PERMISSION to use it, if he or she reasonably believes that the PERMISSION extends from the owner.



now, the term 'insured' is different depending on the coverage(s) that come into play..in your case the coverage is PD (property damage)..



Now for the sake of argument lets assume that the state min. will apply...There are four categories of 'insureds' for coverages, A and B (pd/bi)



CATEGORY 4

(insured means) Individuals who have PERMISSION or GENERAL CONSENT to use the described auto are INSUREDS for claims resulting from that use. The limit of their coverage is the min. amount required by the financial responsiblity law applicable to the accident, regardless of the amount stated in the declarations. With respect to these insureds, we provide only those coverages required by the applicable financial responsiblity law. (in MO that is 10k for PD).



Quote:
Will her insurace rates go up if her company has to pay?
No, the MO fair claims practices specifically say you cannot be rated up for an accident that is not the fault of the insured...(I can find that for you if you want)...but....having said that, if your policy is one of those that gives you extra credit or something for no claims, that might come into play..but not a rate up for a chargeable accident.


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PostPosted: Tue Jun 08, 2010 2:09 am   Post subject:   

But also keep in mind that it should not matter if the driver is an "insured" under the policy. If this is a denial of liability (not coverage) then the owner is still an insured and liable for the use of the vehicle (at least in our opinion). As long as the carrier is not denying coverage (to their insured) it does not matter if they offer coverage to the driver.



Not sure if that is clear or not.

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PostPosted: Tue Jun 08, 2010 11:46 am   Post subject:   

EXACTLY---OP, to reiterate (and beat a dead horse Wink )..If they are denying the claim solely on their drivers lack of permissive use. We think you should fight that, and we think you have an excellent chance to win that fight, (also assuming this driver was not an EXCLUDED driver).



But if they are denying the claim, saying in effect their driver was not negligent, (not at fault)...TOTALLY different animal, in that case everything we've said about permissive use, is of well NO use.



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PostPosted: Tue Jun 08, 2010 2:14 pm   Post subject: insurance  

(A bit confused) Isn't denial of Liability denial of the Insurance converage? Liability IS a 'form' (lack of a better word) of Insurance. Can someone explain, a bit clearer, please? thanks.

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PostPosted: Tue Jun 08, 2010 3:19 pm   Post subject:   

Quote:
(A bit confused) Isn't denial of Liability denial of the Insurance converage?
Nope... two completely different things. In this case a denial of coverage to the driver means they won't defend (settle the claim on behalf of) the driver. They'd say he was not an insured and cut him loose to handle the situation himself (and he _can_ be held liable/responsible. They might also deny coverage if the driver was excluded from the policy. In that case they'd cut both their named insured and the driver loose. Offer _their own insured_ nothing. Their named insured would need to settle this/defend themselves on their own.



Denial of liability means that the insurance company _is_ providing coverage, lets say to the named insured. They are just saying that their insured is not liable. The difference is that they still need to defend their insured with no limits.



Most people think they pay for insurance only to pay claims and settle claims. As we've seen here time and time again, this is not the case. Many times a more important part of the insurance is a defense. Someone accuses you of something.... even if it's incorrect or not completely correct without insurance you have to pay out of pocket to defend yourself.



So the big difference is the defense vs no defense.
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PostPosted: Tue Jun 08, 2010 5:15 pm   Post subject:   

Quote:
Isn't denial of Liability denial of the Insurance converage?
NO, not at all...if I rearend you, do you have coverage under your policy? Of course you do (assuming you have collision coverage)..meaning your policy is in force there are no exclusion etc...but you were not 'negligent' (at fault) therefore you would not be 'liable' (legally responsible) for the damage to my vehicle (remember I rearended you!)..
Quote:
Liability IS a 'form' (lack of a better word) of Insurance
There are liability coverages, in your policy yes, (PD/BI to name two), but if your are NOT legally liable for the damages (at fault) you still have 'coverage' but your carrier would deny my claim (again I rearended you), because you were not negligent.



Accepting liability means that the carrier agrees their insured was at fault for the loss...period..or, denying liablity means they are ascerting their insured is without fault/did not cause the accident therefore not 'liable' for the damages.



Denying a claim because their was no coverage, has ZERO to do with liability...Same example, I rearend your car, NO question, I'm at fault/negligent, therefore liable for your damage(s)..BUT, I didn't pay my premium, so my policy lapsed. Your claim would be denied because there was NO coverage for this loss.


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