Auto Insurance Claims: liable to oneself question car accident, state insurance department, coverage denial

Question
My daughter is currently living with us temporarily.  She has a separate insurance policy and her car is in her name only.  We use the same insurance agent.  She backed into our truck which is paid for and we only carry liability - it is a 1999 model.  We are being told that since she lives with us, they will not pay to have our truck fixed because we cannot be liable to ourself.  We hardly ever drive the truck so we thought it was a safe bet to carry liability only.  She does not drive our vehicles and her name is not on our policy.  This seems like my insurance is fudging a bit with the terminology.  Can you give us some insight?

Answer
I think the claim rep is wrong.  Since she is a resident relative of yours, she would be covered for liability if she was using your vehicle.  But she owns her own vehicle and has her own policy for which she pays a separate premium.  

If she had been using a vehicle owned by you, the exclusion might apply.  But that is not the case here.

I suggest you complain to the claim supervisor.  Ask to see the written policy language supporting the coverage denial.  If this does not work, complain to the supervisor's manager.

If this does not work, complain to the state insurance department.

Unless there is an unusual provision in your state law, I doubt the claim rep is correct.