As posted a few times, I work in auto liability claims, for a company most (all?) of you - in the US at least - have heard of. I often see misconceptions regarding legal liability, what the insurance company (we’ll call them Insurco) can and can’t do with regards to a claim, and general misunderstanding/ignorance.
First of all I strongly suggest all insureds read their policy. What’s especially important - and what often trips people up because they don’t read their policy, ever - is the Exclusions per each coverage, especially the liability coverages. We are all bound by state insurance department guidelines/mandates and regardless of what you may hear from others, we are not out to screw our insureds. It’s poor customer service (we can’t collect premium from someone who leaves us for another company), it’s bad faith (huge issue), and things people often accuse insurance companies of doing is entirely contradictory to state law and doesn’t sit well with the insurance commissioner.
Some real world examples from my previous claims as an adjuster to contemplate. I will simply post the situation and see what you guys think.
- Insured lives in Manhattan, and loans his pickup (why have a pickup in Manhattan is outside the scope here…) to his buddy to pick up furniture from somewhere in Queens. Time passes, the insured is getting a bit antsy, and then is contacted by police in northern New Jersey to please come to impound to pick up his truck. Turns out that his buddy, instead of going to Queens, took a detour to somewhere in Jersey to, err, get laid. In the truck. When the cops found him and the truck, he was bleeding from his … err … member, and the ladyfriend had a bloody mouth (his blood, not hers). At climax, with the lady across his lap, he crossed the centerline and, after bouncing off multiple vehicles (thankfully no injuries except to the driver of our truck, but 4 vehicles worth of property damage) plowed into the Jersey barrier on the other side, at speed.
Does Insurco pay the property damage claims? How about the PIP (personal injury protection) claim for the buddy and his member? Assuming the insured has physical damages coverages for his truck (“full coverage”), will Insurco pay that claim - and under what coverage? Comprehensive (stolen vehicle, for example) or Collision?
Let’s assume that the insured is pressing charges against buddy for stealing the truck. Or not, from a policy perspective. Do you expect your friends, when you loan your car to them, to instead go do whatever they want with it, and if so would you not have a problem with that?
- Medical Payments is a coverage in some states that is a first party coverage (for reasonable and necessary treatment/services resulting from injury) available to occupants of a vehicle for injuries sustained in an accident, regardless of fault. Some states require the coverage, others don’t, and others make it an optional coverage that, when existing on a policy, becomes mandatory to use if there are injuries. This particular New Hampshire claim involved the insured’s vehicle parked, unoccupied, in a McDonalds parking lot. The family members were inside enjoying their Shamrock Shakes or whatever. It’s January and the lot is icy. This particular insured carries MedPay on their policy. Some completely random teenagers decide to play sneaker hockey in the parking lot, because it’s nice and icy and slidy. They get a bit rambunctious, and one kid slips, falls, and in the process smashes his hand through the insured’s rear window, smashing the window and nearly severing his hand. The kid is no relation to the insured or his family, doesn’t even know the family, and in fact the insured was from a different part of the state, simply visiting that town that day.
Injured kid gets an attorney and files a MedPay claim against our insured. Do we pay it?
- I see this one far too often, and it trips up a LOT of people. Insured’s son Pete gets a job as a pizza delivery driver. Pizza place requires all drivers to be insured, and of course pizza place doesn’t provide their drivers with specialized Pizza Delivery Vehicles or separate riders on the pizza place’s own commercial liability policy. In other words, you deliver pizza in your own vehicle which you have to show proof of insurance to the pizza place as a condition of employment. So the insured lets Pizza Pete use one of the family vehicles, on the Insurco policy, to deliver pizza. Pete does this daily to pay for his college tuition. One day Pete gets a bit too distracted by the thoughts of the easy pizza money, and causes a multiple vehicle pileup, injuring several claimants too. He has a carful of pizzas and was en route to a delivery at the time.
Do we pay this claim? One caveat here is that this is more a state-by-state thing.
What if Pete had finished his delivery, and was en route back to work to pick up the next load?
- Insured is suicidal, decides to drive at recklessly excessive speed on the highway, and drives head-on into the center Jersey barrier intent on the end. He makes this last-second maneuver from the rightmost lane of three, in effect suddenly making a left turn at 90+ MPH from the right lane across two lanes of traffic into the barrier. A small handful of claimants either hit our insured, or are struck by our insured, in the process.
Do we pay the claimants’ property damage claims? The claim by the estate for his vehicle? How about death benefits under his first party medical coverages?
- This was my favorite claim because of its absurdity, and thankfully nobody got injured. It’s February in New Jersey, on the NJ Turnpike. 60-70 MPH traffic. Insured is behind a mid-90s sedan with a surfboard strapped to the roof, and insured is driving a medium size SUV. They are in the middle lane of three, with traffic on either side. (I bet you can see where this is going…) Nobody is particularly tailgating or doing anything improper, all are just out for a nice February drive on the turnpike. Suddenly the surfboard takes flight, aiming itself like a missile directly at the insured’s windshield, at highway speed. The insured has visions of sudden impalement and reflexively dives the SUV to the right, out of the way of the surfboard, and in the process smashes into the innocent vehicle in the right lane, pushing both of them into the guardrail on the right shoulder. The surfboard lands harmlessly in the roadway, and amazingly enough the surfers also pull over (oblivious, at first, to the wreckage in their wake; they simply noticed that the surfboard was oddly no longer on their roof and wanted to retrieve it).
The innocent party in the right lane, struck by our insured, corroborates this story 100%. The surfers are cited by the NJ State Police for failure to properly secure property to their vehicle, and our insured is not considered at fault by the police or Insurco. All parties are identified on the police report.
Right-lane innocent party insurance company, however, asserts a claim against Insurco for causing an accident due to the negligent and unsafe evasive action of our insured. They claim as per NJ Joint & Several, we are 100% liable for their damages because, in their eyes, we are 75% liable for their damages for failure to control our vehicle and striking their innocent insured. I deny their claim, after actually laughing on the phone with their adjuster at the absurdity, and am taken to arbitration as a result.
In the meantime, Surfers Insurance Co. is not willing to accept any more than 50% liability for the loss, taking the position that we should have expected that strange things might come off the vehicle in front of us and we should be at a far enough distance back from the vehicle in front of us to react appropriately to whatever may come our way. We were attempting to collect 100% of our damages from Surfers Insurance for their driver’s negligence as cited on the police report.
What do you think the decision was in arbitration?
- This was my most recent odd one. Insured loaned her vehicle to her brother, non-resident, because her brother’s car was in the shop and out of service. Brother is insured by another carrier, not Insurco. Brother goes to a party with his exchange student girlfriend (true story), someone Roofies the girlfriend (so they say), and then on the way home from the party the girlfriend allegedly grabs the wheel of the car and turns them into a telephone pole. Nobody got hurt. On the recorded statements both parties state that the girlfriend was so out of it she had no recollection of the events or loss, and that she only knew what allegedly happened when the driver told her about it the next morning. We suspect that the driver was DUI and made the story up to get out of a DUI, but we have no proof of this.
As Insurco, insurer of the vehicle and not the driver, do we attempt to recover damages from anyone (our vehicle was a total loss, and we paid nearly $22K to total it out)? If so, who?
