Auto Insurance Claims: car insurance coverage, state insurance commissioner, car insurance coverage

Question
My son who lives with me has his own car and auto  insurance policy and he might have to drive my car occasionally.  Do I need to add him to my policy as an occasional driver or his own policy will cover it already?

Thanks.

Answer
Hi John,

This apparently simple question has a few tricks and turns we need to discuss, and part of the answer may depend upon what state you are in, especially when we consider the potential exposure for YOU should he cause an accident with horrific injuries.

I do not know the exact answer, so I am going to have you ask your insurance agent AND your state insurance commissioner http://www.settlementcentral.com/links.php  

I do have some comments about the arrangement for his use, and whether or not his driving will be excluded from YOUR policy or HIS policy, or BOTH.

Here are the two factors that need to be considered: 1) is the vehicle available to him for his regular use? AND 2) do you live in one of the states that has the so-called "family car doctrine"?

First is the issue of whether or not your son has access to your car "for his regular use".  That is a term of art in your policy that COULD EXCLUDE him from coverage under your policy.  You need to discuss that term with the insurance commissioner in your state.  It does not mean that your son regularly uses your car; instead, it just means that he COULD use the car if he wished.

Hence, if he were to be excluded from your policy, and especially if your state has the family car doctrine, then if he should cause an accident with exceptional damages, his own policy limits would be consumed, and the victims might be able to look to your personal assets to satisfy a judgment.

Even if your policy excludes your son, he still can look to his own policy for coverage, and in fact his insurance will provide such coverage as he may have for liability and PIP or MedPay and Underinsured Motorist coverage.  But I am guessing that his limits are minimal, so there will be some exposure for you on claims from his victims, as mentioned above.

The next topic is what if he wrecks your vehicle, causing many thousands of dollars of damage?   Who will pay for the damage?  In this case, his own property liability coverage should pay for the repairs, but only up to the amount of his limits.  Hence, there could be some repair expenses (or, if the vehicle were to be totaled) that may be in excess of his limits.  

And--IF your son is excluded from your own insurance, as discussed above, then anything YOUR insurance pays for collision will result in a lawsuit against your son to collect for his negligence.  

That is a lot of twists and turns for what appeared to be a simple question, but I hope you can appreciate the analysis, since the issues are broader than one would think at first glance.

Best wishes,

Dr. Settlement, J.D. (Juris Doctor)
www.SettlementCentral.Com