Auto Insurance Claims: suspended license and car insurance, policy declarations, unlicensed driver

Question
My question is this, if a person's license has been suspended and is driving anyway and they get into an accident, will the insurance cover the accident, or upon finding out about the suspension will the insurance company cancel the driver's coverage? The person I know has lost their license and still has been paying for insurance coverage. Does it make sense for them to keep doing so, especially since they keep driving even though their lic. is suspended?

Answer
Hi Anne,
This situation is not properly addressed by the legal wording of the policy.
I have a friend in the exact same position.  I have discussed her situation with other agents and brokers and our opinion is that if the person with the suspended license is the named insured owner of the policy and not just a person in the household that is listed as a driver, the insurance company will have no choice except to cover the accident per the legal wording and for the coverages shown on the policy declarations.  Of course the company will immediately cancel the policy following the accident.  
Every policy contains legal wording that if the owner of the policy allows someone in the household to drive the car and that person is not named on the policy then there is no coverage.
The policy also contains legal wording that if the owner of the policy knowingly allows an unlicensed driver to drive the car then there is no coverage.  In all the policies that we have read, and in our opinion, that wording appears in a location of the policy where it would not seem to apply to the owner of the policy.  Of course the insurance company will do everything in it's power to deny the claim, but it is our opinion that the first accident will be covered.
By definition, the named insured owner of the policy is the person named on the policy declarations and spouse.

This problem rarely arises because most companies run an annual check with DMV of all the drivers on the policy in order to be able to charge the proper rate.

I hope that you find this information to be helpful.

Your feedback by rating my response will be appreciated.

Sincerely,
Bennie
San Francisco Bay Area