QuestionHi Bennie,
I read the message and answer from Kevin to you back on 11/28/2007. I have a similar situation where i was hit by a 19yr old that turned out to be excluded from her fathers policy ... the agent was Fred Loya Insurance, the insurer Old American County Mutual Fire Insurance Co. My accident was also in Dallas Texas.
I was wondering if you could give me Kevins email address so i can contact him and see if he succeeded in his claim.
I have done research on Texas insurance and find that the Transportation and the Insurance codes allow exclusions for drivers who had drivers licenses suspended or a history of reckless driving, but can't find any statute that says the insurers can arbitrarily exclude household members just because they live at the same address as the person who went to purchase the insurance. The Transportation code mandates insurance for all family and household members.
I have found documents on the web that state these agents are excluding all persons shown as living at the address of the person purchasing the insurance except for the one purchasing it. Also i have found the underwriting guidelines telling the agents to have all persons purchasing the insurance to sign the form 515a exclusion for new policies.
This practice appears to be against the mandate of auto insurance per the Texas Transportation code and is causing a large class of people to be uninsured and enabling people to register vehicles making them available to the other excluded household members. The policy of the girls father that hit me shows 15 people as excluded from the policy and two named drivers and three vehicles as insured. It appears to be at the least, a lack of due diligence to exclude 15 household members, name two as drivers, then insure three vehicles.
Any help will be greatly appreciated.
Mike
AnswerHi Mike,
I no longer have Kevin's e-mail address, but I can provide you with a lot of information.
His situation was different from yours. The parents had purchased the policy several years ago and the agent encouraged them to add the rider OACM.CP.013 to the policy, which turned it into their 'super saver' policy and lowered the rate by limiting the coverage to only the people who were named as drivers on the policy.
With that clause, there was no automatic 30 day grace period for adding new drivers in the household, plus so much time had passed, they forgot that the clause existed.
After talking with Old American County Mutual at their Texas offices, the Texas insurance broker. Old American County Mutual main office in Georgia, the Texas department of Insurance and with Kevin, it was determined that the only recourse left open to him was to file small claims court action against the owner (parent) of the car. He never contacted me with the final results. Because there was a valid insurance card (in the owners name) in the vehicle, no action was taken against the driver and no report made to the state
It is standard with ALL companies that if a driver in the household is not named on the policy, no coverage is provided. However, most companies allow a 30 day grace period to add a child that just became a new driver or someone who became a new resident of the household.
(I even had a situation where a wife was denied coverage from an accident in her husbands car. They hed been married for over a year, each kept their own insurance and neglected to add the other as a driver to their policy. This denial was perfectly legal.)
The legal wording of an insurance policy, the conditions under which an insurance company is able to add an exclusion, the rate making process and everything else to do with insurance law is governed by the insurance commissioner.
Some states have a very strong insurance commissioner who controls the insurance companies, other states have a weak insurance commissioner who is controlled by the insurance companies.
Texas has a very weak department of insurance, which makes the insurance commissioner weak.
The cases where you have seen up to 15 exclusions, most were all 'voluntary' done by the insured to avoid paying a premium for an underage driver or a driver who would have a penalty due to his/her driving record. In states with a strong department of insurance, this would not be allowed.
In my opinion, in the western states area, Washington and California have the strongest insurance commissioners. They are elected by and responsible to the voters (and do NOT take campaign donations from insurance companies). In many states, the commissioner is merely an appointee by the governor, who is beholding to the insurance companies and their large campaign donations.
As an example between California law and Texas law, If Kevin's wife's accident had taken place in California, since the drivers name did not appear on the insurance card she would have been issued a citation to appear in court with proof that she was listed as a driver. When she failed to show proof, the fine would be $1,000 for the first offence. The insurance company would have been required to file proof with the state that the owner of the car carried insurance that covered the driver. When this failed to happen, both the owner and driver would have had their drivers license suspended until proper insurance was secured and it would be mandatory to file proof for the next three years.
All states allow insurance companies to have exclusions and to write restricted 'named driver only' type policies, but those states with a strong insurance commissioner have strong laws that will legally and financially punish someone who allows an uninsured person to drive their car.
Until the people of Texas and other states with weak insurance laws make demands to their elected officials to 'fix' the system, you will remain at the mercy of the insurance companies.
I hope this information is found to be helpful.
Your feedback by rating my answer will be appreciated.
Sincerely,
Bennie
San Francisco Bay Area
