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  #1  
Old 03-29-2011, 07:51 AM
pullin pullin is offline
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Car Insurance question -- Unlicensed Driver?

How does an insurance company react when an unlicensed driver is in an accident (in an insured car)? I just discovered one of my kid's classmates has been supplied with a car, but has no driver's license (no permit, no hardship license, no training at all). I'm pretty sure the car itself is insured for the mom and dad to operate.

Would the insurance company deny a claim if an unlicensed teen is using the car (with parental permission)? Would liability coverage still apply?

Just curious, I guess.
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  #2  
Old 03-29-2011, 08:20 AM
md2000 md2000 is offline
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Rules may vary from state and country. In Canada, I've never had the need to answer this question, but this is what I've heard -
- the person(s) holding the insurance policy and owning the car put in a claim.
-if those people (owners) knew it was an unlicensed driver, they allowed a violation of the law, no payout.
(Similarly - drunk driver - no payout; if you lend a car without knowing if the driver has a valid license, no payout)
-if the car was taken without their permission, then it was car theft; if they want to swear to that. However, some provinces will not lay car theft charges if the "thief" lives in the same dwelling.

- I believe (not sure) that the insurance still pays injured third parties, but can then sue the policy holder and driver to recover their money. If not, then the injured party's insurance pays, and can sue the driver and owner.

the creme de la creme comes when the idiot totals the car, the insurance refuses to pay, and the owners have to keep paying the car loan for a few more years...
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Old 03-29-2011, 09:57 AM
Qwakkeddup Qwakkeddup is online now
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My .02 cents, no pay out here, Drunk was a passenger, and had his 17 yo girlfriend driving with her learners permit. Drunk had a DL, but was drunk of course.
She pulled out in front of my wife from a stop sign. We had to pay a $500.00 deductible and our comprehensive kicked in when drunk's insurance refused to pay.
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Old 03-29-2011, 11:32 AM
Fir na tine Fir na tine is offline
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In most states (underline most) insurance follows the vehicle. As long as the person operating had the permission of the owner, the insurance company is on the hook for any damage caused. If for some reason that insurance company doesn't pay, your insurance company should cover any damages under your Uninsured Motorist/Underinsured Motorist portion of your policy.
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Old 03-29-2011, 01:08 PM
Keeve Keeve is offline
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[QUOTE=Fir na tine;13627362]As long as the person operating had the permission of the owner, the insurance company is on the hook for any damage caused./QUOTE]Even if the owner permitted the operator to do an illegal act with that vehicle? That would surprise me.
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Old 03-29-2011, 01:33 PM
md2000 md2000 is offline
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Quote:
Originally Posted by Qwakkeddup View Post
My .02 cents, no pay out here, Drunk was a passenger, and had his 17 yo girlfriend driving with her learners permit. Drunk had a DL, but was drunk of course.
She pulled out in front of my wife from a stop sign. We had to pay a $500.00 deductible and our comprehensive kicked in when drunk's insurance refused to pay.
Never really thought about it, but I assume this means the DL passenger supervising someone with a learners permit has to also be sober? Makes sense, but is it explicit in law?

Some provinces (and I assume some states) have graduated drivers licenses; learners, first year drivers, etc. are sometimes not allowed on high-speed expresways, not allowed to drive after dark, not allowed passengers, zero-tolerance on alcohol, etc. I wonder if the insurance company would refuse to pay in these situations.
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Old 03-29-2011, 01:37 PM
md2000 md2000 is offline
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[QUOTE=Keeve;13627863]
Quote:
Originally Posted by Fir na tine View Post
As long as the person operating had the permission of the owner, the insurance company is on the hook for any damage caused./QUOTE]Even if the owner permitted the operator to do an illegal act with that vehicle? That would surprise me.
Provincial government insurance (mandatory, and MUCH cheaper than free market) will NOT pay repairs if the owner knowingly allowed an unlicensed driver to use their car. But, if an unlicensed or drunk driver causes a wreck, they will pay 3rd party and retreive the cost from the owner/driver; it's your car, if someone breaks the law in it, that's your problem, not the insurance company's.

Last edited by md2000; 03-29-2011 at 01:38 PM..
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  #8  
Old 03-29-2011, 01:40 PM
Voyager Voyager is offline
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Quote:
Originally Posted by md2000 View Post
- I believe (not sure) that the insurance still pays injured third parties, but can then sue the policy holder and driver to recover their money. If not, then the injured party's insurance pays, and can sue the driver and owner.
Not sure if you mean third parties in the car or third parties in other cars. I can testify that in the US (two states at least) uninsured motorist coverage does pay. My car, parked off the street, was damaged by a car reported stolen when I was 850 miles away, and it got paid. 15 years ago, in California, I hit a car pulling out from the driveway driven by an unlicensed and I believe uninsured driver, who had his license revoked. My insurance also paid, no problem.
It was satisfying to hear the cop yelling at this clown.
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  #9  
Old 03-29-2011, 01:42 PM
Freddy the Pig Freddy the Pig is offline
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The standard Personal Auto Policy, common I believe to all at-fault states, excludes liability coverage when the vehicle is being driven by an unrelated person "without a reasonable belief" that he or she is entitled to do so.

In Illinois at least, the state Supreme Court has construed this exclusion to apply to unlicensed motorists; see here:
Quote:
(T)he Supreme Court issued an opinion in Founders Insurance Company v. Munoz, which addressed the frequently recurring question of whether an unlicensed driver is covered under an auto liability insurance policy which excludes coverage for "use by any person of a vehicle without a reasonable belief that the person is entitled to do so".

Holding that the exclusion was not ambiguous and was not in violation of public policy, the Supreme Court in Munoz stated that a person who does not have a valid license cannot have a "reasonable belief" that he is entitled to drive, and this exclusion applies even if the person owns the vehicle or is permitted to use it. The Munoz opinion supports the position that auto liability insurers may limit their risk by excluding insureds and permissive users who do not have a valid driverís license.
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  #10  
Old 08-15-2015, 07:33 PM
gojunk001@yahoo.com gojunk001@yahoo.com is offline
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car insurance question

I recently found out Allstate had been aware of an unlicensed driver actively on the roads but would not cancel his policy. I guess they are just so greedy they will continue to let him pay premiums--then when something happens THAT'S WHEN they will all of a sudden refuse to pay for damage.
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  #11  
Old 08-16-2015, 11:13 AM
bob++ bob++ is offline
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Quote:
Originally Posted by md2000 View Post
Rules may vary from state and country. In Canada, I've never had the need to answer this question, but this is what I've heard -
- the person(s) holding the insurance policy and owning the car put in a claim.
-if those people (owners) knew it was an unlicensed driver, they allowed a violation of the law, no payout.
(Similarly - drunk driver - no payout; if you lend a car without knowing if the driver has a valid license, no payout)
-if the car was taken without their permission, then it was car theft; if they want to swear to that. However, some provinces will not lay car theft charges if the "thief" lives in the same dwelling.

- I believe (not sure) that the insurance still pays injured third parties, but can then sue the policy holder and driver to recover their money. If not, then the injured party's insurance pays, and can sue the driver and owner.

the creme de la creme comes when the idiot totals the car, the insurance refuses to pay, and the owners have to keep paying the car loan for a few more years...
It's pretty much the same here in the UK: Cops stop a drunk driver and find he has no licence and is not named on the policy. The owner is the driver's mother and they ask the Question.... "Did you give him permission?"

Mummy has a dilemma: 1. She says no - the little blighter took the keys without asking. 2. She says yes - I said he can use it. In the first case, he gets done for licence and DUI and also for TWOC (Taking without the owners consent - not the same as stealing since no intention of keeping it). In the second, she gets done for allowing the little twerp to drive her car. Of course he still faces the other charges.

If said twerp was involved in an accident, the insurance would cover all third party claims including those of any passengers in the car (This would also apply if a stranger stole the car). Damage to Mummy's car would also be covered in scenario 1, although they would try to wriggle out. In scenario 2. They are stuffed.

Back in 2010 there was a horrible accident not far from where I live. A car hit a tree and two teenage passengers died. The driver, a 16yo lad, was drunk and too young to have even a provisional licence - he survived. One of the passengers, a 14yo girl also survived, but with life changing injuries. She was, at the time, near neighbour and I used to see her in a wheelchair going to school. Three years down the line, they were still negotiating with the insurance Co over her compensation, although there had been several interim payouts.
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Old 08-16-2015, 11:38 AM
turtlescanfly turtlescanfly is offline
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Quote:
Originally Posted by md2000 View Post
Never really thought about it, but I assume this means the DL passenger supervising someone with a learners permit has to also be sober? Makes sense, but is it explicit in law?

Some provinces (and I assume some states) have graduated drivers licenses; learners, first year drivers, etc. are sometimes not allowed on high-speed expresways, not allowed to drive after dark, not allowed passengers, zero-tolerance on alcohol, etc. I wonder if the insurance company would refuse to pay in these situations.
In my state (PA), as I understand it, a driver with a learners permit must have a licensed driver in the passenger seat at all times while operating the vehicle. For all legal purposes, that licensed driver is considered the one to be operating the vehicle (as such, a driver with only a learners permit does not even need insurance, as legally they are not driving).
I neglected to inform my insurance carrier that my son got his drivers license ( able to drive alone). He was in an accident ( minor) within a week of getting it. Insurance company paid, no questions, although they did add him onto the policy at that time and started charging me a higher premium.
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  #13  
Old 08-16-2015, 08:07 PM
Isilder Isilder is offline
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Quote:
Originally Posted by Fir na tine View Post
In most states (underline most) insurance follows the vehicle. As long as the person operating had the permission of the owner, the insurance company is on the hook for any damage caused.
No.. Most likely the car owners insurance company is getting out of it because the owner is irresponsible. Being drunk is another way the owner is irresponsible, and where the person in the drivers seat is a learner, the driver is the person in the passenger seat next door... so using a learner to drive when one is drunk.. doesn't work, the drunk in the passenger seat is still a driver when the learner is in the drivers seat.

Another common exception for the vehicle insurance is that it doesn't cover damage on ones own property.. Even if the kid is driving on private property and doesn't need a license, they may say that it was not covered because it wasn't actually road use.. or because the collision was with the car owners own building/fence/land... I am aware that many insurance companies have paid out for " on ones own property" damage even though the insurance policies generally exclude collision with own property..
I am saying they don't always pay.. Not that its a high % of such claims not paid..The low % may well be the cases where an unlicensed driver is driving.. even if they don't technically need the license due to it being private property.
(it would look better if it a learn to drive enterprise operating there on that land..)

Last edited by Isilder; 08-16-2015 at 08:10 PM..
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  #14  
Old 08-17-2015, 02:10 AM
qualityleashdog qualityleashdog is offline
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My mom never had a license, but she briefly had a learner's permit. She was working at a bar one night, and a drunk decided to use her permit to get him home. So she's driving his car, he's the licensed adult in the front seat, just as her permit requires, except he's totally drunk. She stops at an intersection that had no stop sign, but several trees and bushes, so a cop that was watching the bar had followed her, and used the fact that she stopped where there was no stop sign as an excuse to pull her over on suspicion of drunk driving.

The cop was probably disappointed to find that she was a worker and not a bar patron, so she hadn't had anything to drink. But he only gave her a warning ticket, and didn't say anything about her driving instructor being drunk. This happened in Indiana. The cop could've been lazy and just didn't make the connection that he could've got them both on a technicality, or maybe he was just glad to see two people doing what they had to do to keep a drunk from driving. I got my license in Indiana, too, but I don't remember ever reading that your driving instructor had to be sober, but maybe they figure it's implied. The right case will probably come along and they'll have to write into the statutes, if they haven't already.
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