Auto Insurance Claims: Auto Insurance Claim, insurance expert, claim settlement

Question
My daughter drove my vehicle without my permission.  She caused damage to my vehicle.  I did call the local law enforcement agency to verify that the vehicle was not involved in a Hit and Run. The Deputy told me that they would have to arrest my daughter if he wrote a report.  After I told the Deputy that I did not want my daughter arrested and that she was willing to pay the deductible, he suggested I talk to my insurance company or take the vehicle to a body shop to see if they could repair it. He also suggested I say I damaged the vehicle.  I filed a claim with my auto insurance company. I explained to them the circumstances.  I faxed a handwritten letter from my daughter where she admits she drove the vehicle without my permission and caused the damage. I have since been told they are still investigating coverage. When I purchased this insurance (full coverage), my daughter at the time was not a driver. I do not understand how it is any different from someone (a stranger)or unknown suspect taking my vehicle & damaging my vehicle but it is repairable.  Thanks

Answer
Hello Sonya,

First let me say as a former police officer that you received some very bad information from the officer.  Why on earth would your own daughter be arrested for driving your car???  Even if you did not give her permission, this is hardly an auto theft.

Secondly, the officer has no business becoming involved in your insurance negotiations. Seriously?  And finally, he wants you to lie to your insurance company! That's called fraud. In my opinion, this person has no business being a police officer.

So moving from the outrageous ...

Regarding your insurance, you have left out some important details.  You say your daughter was not a driver.  Is that because she was not of age to drive, and/or because she did not have a drivers' license?  When she did become a driver, did you notify the insurance company?

Here's the point.  Drivers in the household impact risk for an insurance company.  Particularly teen drivers.  At this point in time, your carrier is conducting a coverage investigation.  In other words, they want to know if/when your daughter became a driver, did you allow her to drive the vehicle.  If you did, they could consider that you were doing so in order to avoid a higher premium.  If they can prove that, they could deny you coverage for the accident, arguing that you had an obligation to notify them when your daughter obtained her license.  They will likely take the position that it was your obligation to either add her to your policy or to have her excluded.

Simply stated, an exclusion means that under most circumstances that excluded driver would have no coverage in the event of an accident.  

At this point, he insurance company needs to prove that you misrepresented the facts.  If they can prove misrep - at least in their mind - be prepared for a denial.

However - and assuming the amount of damages justifies this - a lawyer could conceivably make the argument that if the insurance was aware of your daughter when you first took out the policy then it was their responsibility, when they renewed the policy, to inquire on her driving status.  Effectively, this relieves you of misrepresentation.

I cannot provide you with a legal opinion on this.  Suffice to say, I have seen this argued successfully.  If there are injuries, liability issues, or significant damages to your vehicle, then I would strongly recommend that you speak to an insurance lawyer sooner rather than later.

In the future, make certain all licensed drivers in your household are either listed or excluded.

Let me know if you have any questions.

Regards,
Jane