Auto Insurance Claims: auto accident no insurance in effect, state insurance commissioner, driver responsibility program

Question
I have a friend who recently rear ended an SUV(he drove a compact) She decided not to repair her car(too expensive) She discovered after the accident that her insurance had been cancelled(failed to pay premium). She did not receive a ticket or summons for no insurance only for being at fault in a accident. She is worried about both her liabilty and the legal penalties. Michigan is a no fault state, but does have a Driver Responsibility Program.

Answer
Dear Andrew,

This is like waiting for the other shoe to drop, isn't it?  You are in essence asking me if in fact the state will come after her for no insurance.   I have no idea, of course, whether the other insurance company will make much of a fuss if the amount of damage is not too high.

Here is  what can happen.  Of course I have no idea about your particular state agency, but this is my experience in similar circumstances.  The state will first look at the police accident report and if it shows that she does have insurance in place, they will look no further, UNLESS there is a complaint from a party that is looking to collect from your company.

THAT is the most likely way that your friend will get nailed.  They can assess the fee, as provided in your state, and unless she can pay she risks a suspension of her license.

MAKE HER BUY INSURANCE ASAP.


WAS THE CANCELLATION OF HER INSURANCE MADE UPON SUFFICIENT WRITTEN NOTICE?
One quick topic to address with her is whether or not she can state that the insurance company failed to provide written notice of cancellation well in advance of the actual cancellation date.  In most states that notice is ten days.  If the notice was insufficient, then the cancellation is not effective, and the company must pay.

A good place to start her research on this would be with your state insurance commissioner   http://www.settlementcentral.com/links.php
Your state does not have a true consumer-support site for insurance problems since it includes financial services and securities.  Look to Washington's Mike Kreidler for excellent example of consumer support in insurance matters http://www.insurance.wa.gov/

Side topic: give your legislator the URL to Washington's site and ask her why your state does not deserve as fine a consumer advocate as Washington's Mike Kreidler.

Bottom line: try to get information that supports a claim that the cancellation was ineffective because of lack of notice.

Best wishes,

Dr. Settlement, J.D. (Juris Doctor)
www.settlementcentral.com