Auto Insurance Claims: omnibus clause, insurance terms, policy states

Question
QUESTION: My boyfriend just got home from active duty and we were wondering if my car would be covered if he drove it So I called the customerservie/claims department of my insurance company and asked. I was told that my insurance covers my car although my boyfriend would not be covered if he got hurt in an accident while driving my car. My boyfriend has liability insurance on another car therefore is legal to drive my car and I was told specifically that my car would be covered. My boyfriend got into an accident where both cars were totaled after only being home for less than a week. I filed a claim and then was told my adjuster that my car was not covered because I have a Restricted policy and I was not driving. This was the first time I have heard of this restricted policy and even after i was told that I called customer service again and was told that the restriction on my policy states that my care would be covered though now i will be required to either add or restrict my boyfriend from my policy. I am not sure who is telling the truth or where I can get strait answers, I would never have signed a restricted policy that would not cover my car and this was never explained to me and I was told several times by several people that my car was covered all the time. Now I have a totaled car which is financed what am I supposed to do? And does a restricted policy fall under "full coverage" which I specifically asked for? Thanks.

ANSWER: Hello Kelly,

I am sorry you are in this situation. Insurance companies can be a little are not very good about giving you a straight answer sometimes. To make matter worse, they make up terms that do not convey their real meaning. “Full Coverage” does not me full as you get everything you think.

Full coverage, in insurance terms, means that you get collisions and comprehensive coverage, subject to the exclusions and restrictions of the policy. You do not get towing, rental, or even uninsured/ underinsured bodily injury or property damage. You have to ask for those coverages in addition to full converage (note: some insurance companies do include the uninsured motorist within full coverage, but others do not – so you really never know).

Your issue is clearly a coverage situation. Is you boyfriend covered? The answer should be yes, unless he is specifically excluded from converage. He would be covered under a clause commonly referred to as the omnibus clause.

This clause basically provides coverage or anyone driving the car, except an excluded driver. In other words, you do not have to specifically list every single person that drives, but you do have to list the people you would want exclude from coverage.

In addition to this clause, you have to worry about the regular use exclusion. If someone has regular access to your vehicle and is not a member of your household (lives with you), then there might not be coverage.

In any event, all of these exclusion require an investigation from the insurance company. Sounds like your insurance company is telling you that your boyfriend is excluded. Contact them and see how this happened. You need a straight answer. Where did you sign this exclusion? (note, some states do not require you to sign anything).

Now, you are talking about a Restricted Policy, what is this about? Sometimes, insurance agents will sell you different policy packages -- not your run of the mill policy. This usually happens when the agent wants to lower your payment or you have a special situation. This could have been the case and you will have to request a copy of the policy and declaration page to see exactly what your policy reads.  

Ask for all paperwork and contact a lawyer. When you are dealing with the total loss, consider visiting:

http://www.auto-insurance-claim-advice.com/totaling-a-vehicle.html

And I would recommend this eBook, it will help you on the negotiation:

http://www.auto-accident-blog.com/go/Total-Loss-Ebook.php


Good Luck,
Anne


---------- FOLLOW-UP ----------

QUESTION: Is the omnibus clause in every policy? I was told that the ONLY way my car is covered is if I'm driving and that my policy does not include a "permissive clause". If he is not covered will his liability insurance cover my car?
Thank you

Answer
Hello Kelly, the omnibus clause is in almost every policy. Chances are is that your police also has it in it. As I outlined above, even if you have the omnibus clause, there might be  a permissive use exclusion (most polices have it). You are talking about a restricted policy, which is different and only very few people have them. If you do, then you need to read the actual policy language (or have your adjuster give you the exact quote where you are excluded).

Why do they have an omnibus clause and a permissive user exclusion?

The omnibus clause gives coverage to anyone driving with permission (so no thief would be covered). The ominbus clause is also limited by the available use exclusion, so you cannot get insurance in one person's name and "lend" the car every day to a real driver. Rates are adjusted for each driver and if you can lend the car to anyone and give them coverage, everyone would have insurance on the "best driver" but use their vehicle with permission... You see, they exclude the regular use of someone else.

Is this what is happening here? your boyfriend uses the vehicle regularly and this is why is excluded? Or do you have a restricted policy where he is specifically excluded?

In anyway, you need the actual policy language and the adjusters must (not optional) provide it. If they are not giving you an straight answer, talk to a lawyer.

Good Luck
Ann