Auto Insurance Claims: auto theft in Mexico, claims advice, insurance dispute

Question
My car was stolen in Rosarito, Mexico, about 25 miles south of the border.  I had full comprehensive insurance, but my carrier is saying the loss was not covered due to it being out of the country.  I filed appropriate police reports in Mexico (have copies) and notified the California Highway Patrol as soon as I returned to the US and found out the Mexican reports were inadequate (within about 10 days of the loss).  I've searched my policy and could not find any exclusion, but I was told by the company that it was a later adjustment (I was not notified of any change -- I go down to Mexico a lot so I would have paid any additional premium necessary had they notified me of a change in coverage).  No where does my signature appear on any modified policy.  If they continue to refuse to pay the claim, do I have standing to sue.  I hate to do that but there is a significant amount of money involved.  Thank you for your help.

Answer
Hello James,
In my experience, most US policies do not cover any types of loss in Mexico.  Canada yes, Mexico no.

But, the bottom line, and what is important is what YOUR policy says.  Depending on how the policy is written, Mexico might be addressed under the exclusions section, or it might address the issue in a separate section of the policy.  Be absolutely certain that you have searched every section of your policy.  Look not only for Mexico, but look for clauses that address where specifically your coverage is valid.

If there is nothing in your policy to exclude Mexico, or other foreign countries for that matter, here are some options for you.

First, the company has denied your claim.  A denial can be rightly issued when there is no coverage (in this case, no coverage in Mexico), but like any other denial, when a claim is denied, the grounds for denial must be based on the policy language, terms, and conditions.  What this means is that it is the carrier's responsibility to cite for you the specific language in your policy that excludes coverage in Mexico.  They must address you in writing the policy clause that applies.  And, the policy provision must match the term of insurance applicable to your loss.  So if you car was stolen in December and your policy does not renew until, say, January, they cannot apply January's conditions to the December loss.

Did they send you a denial letter?  They have to do that!  If not, contact your adjuster and demand that they cite the policy language that applies.  And ask the adjuster for verification in writing.  I would suggest that you put this request in writing yourself.

Were you advised when you purchased the policy that you were covered in Mexico?  Did you purchase the policy from an agent?  Did that agent advise you that you were covered?
If so, you might have an action against the agent.  Agents have what is called E&O coverage, that is errors and admissions.  This would cover providing false or misleading information to someone.  But you would probably have to provide some grounds to prove this.

With regard to your signature, when your policy renews, the carrier can change the terms of the policy.  However, they must notify you.  Did you receive amendments in the mail when the policy renewed?  Once you pay your premium on a renewal, your payment implies your consent to the changes. You don't sign the amendments. So, in addition to the policy, you must also search for any changes, amendments to the original policy conditions.

Legal help?  Posssibly.  First I would suggest you do all your homework.  If you are convinced the denial is unjust, then you might want to consider legal assistance.  Sometimes even the presence of an attorney will make a carrier pay.

With an attorney, you will pay a percentage or a fee, depending on the laws of your state.  At the risk of sounding self serving, if you think you have been the victim of an unfair claim denial and you want to at least delay the expense of an attorney in favor of handling the claim yourself, you might want to purchase my eBook, Power To Profit.  The book costs $19.95 and gives you insider instructions on how to take control of a valid insurance claim.  The book is online at my website, http://www.SolutionsForYourInsuranceClaim.com

However, before you buy anything or seek legal counsel, make certain you are on solid ground.  Search your policy, search your amendments, double check your Declarations Page, and require they cite the policy language in writing, for your denial.  If, after all that, you believe you are on solid ground, then you can make a decision on how you are going to take control.

Good luck.

Jane Pytel
http://www.SolutionsForYourInsuranceClaim.com