License suspension/insurance coverage

[HerVoice]

I live in Ohio.

My adult daughter's boyfriend is under FRA suspension. For reasons I don't understand, she let him drive her vehicle yesterday and he was involved in an accident. The other driver was at fault, and took full responsibility for the accident. My daughter's vehicle will likely be deemed a total loss.

My husband co-signed for my daughter to purchase this vehicle, and she still owes several thousand dollars on it. So now, we are concerned. My understanding is that if the accident were the boyfriend's fault, that my daughter's insurance would not cover the damage due to his license being suspended. But is the same true if the accident was not his fault?

Any insight is appreciated.

 

[Just Blue]

I live in Ohio.

My adult daughter's boyfriend is under FRA suspension. For reasons I don't understand, she let him drive her vehicle yesterday and he was involved in an accident. The other driver was at fault, and took full responsibility for the accident. My daughter's vehicle will likely be deemed a total loss.

My husband co-signed for my daughter to purchase this vehicle, and she still owes several thousand dollars on it. So now, we are concerned. My understanding is that if the accident were the boyfriend's fault, that my daughter's insurance would not cover the damage due to his license being suspended. But is the same true if the accident was not his fault?

Any insight is appreciated.

The other drivers insurance will cover the damage if that driver is deemed at fault. Your daughters car may be repossessed if the loan company learns she is allowing unlicensed idiots to drive the car...which they likely will.

I will tag @Ohiogal , a site vetted Ohio Attorney, to take a look at your thread and offer her opinion.

 

[Ohiogal]

I live in Ohio.

My adult daughter's boyfriend is under FRA suspension. For reasons I don't understand, she let him drive her vehicle yesterday and he was involved in an accident. The other driver was at fault, and took full responsibility for the accident. My daughter's vehicle will likely be deemed a total loss.

My husband co-signed for my daughter to purchase this vehicle, and she still owes several thousand dollars on it. So now, we are concerned. My understanding is that if the accident were the boyfriend's fault, that my daughter's insurance would not cover the damage due to his license being suspended. But is the same true if the accident was not his fault?

Any insight is appreciated.

The at fault driver's insurance will cover as long as that person has insurance and a license. Of course, your daughter really needs to comprehend the seriousness of this. If boyfriend is even marginally at fault, she can lose a whole heck of a lot as she is responsible for his actions.

 

[HerVoice]

@Just Blue thank you!

@Ohiogal thank you! I agree 100% that she needs to understand how serious this is.

 

[adjusterjack]

My understanding is that if the accident were the boyfriend's fault, that my daughter's insurance would not cover the damage due to his license being suspended.

Maybe, maybe not.

Does she and the boyfriend live together?

Critical question. Needs an answer.

At any rate, might not matter now, but could be an underwriting issue on renewal.

 

[HerVoice]

@adjusterjack My daughter's address is my house. She has lived with me for the past couple of years. However, she hasn't actually stayed at my house in almost a year because I won't allow the boyfriend to stay there also. So she has been staying with him, and he also lives with his parents.

 

[adjusterjack]

I'm guessing that she has failed to advise her insurance company of that arrangement. Concealing that arrangement is dangerous. The underwriting of an auto insurance policy has nothing to do with a person's mailing address. It has to do with where the car is, how it's used, and who uses it.

There are two sections to the standard personal auto policy.

Liability for injury or damage that the negligence of "an insured" causes to others. In that section "an insured" is anybody who uses the car with the owner's permission. However, use by an unlicensed driver is limited to the state's minimum liability limits regardless of the actual policy limits.

Damage to the insured's own vehicle. Here's where it gets dicey. That section excludes loss to a covered vehicle if operated by a non-family member who is a resident of the household unless the insurance company was notified of that person prior to an accident. Your daughter's household is where she lives and the boyfriend is a non-family member of her household with respect to the use of her vehicle.

You would have to read her policy to see if it has the same wording.

I'm sure it's not the first time that the boyfriend used her car. Her insurance company had a right to know that and charge the appropriate rates. She may have a cancellation or non-renewal in her future.

 

[FlyingRon]

Note that the other party/insurer will only pay the FMV of the car (before the accident). That may not be sufficient to pay off the loan balance, which your husband is still potentially responsible for.

 

[adjusterjack]

Note that the other party/insurer will only pay the FMV of the car (before the accident). That may not be sufficient to pay off the loan balance, which your husband is still potentially responsible for.

Same thing could happen if the daughter's own insurance paid for the car.

Car values depreciate faster than loan balances which is why people buy GAP insurance.

 

[HerVoice]

Thank you all for your responses. I guess all we can do is wait and see what happens and hope for the best.

 

[HerVoice]

@adjusterjack 12 years ago, my oldest child had purchased a brand new car and got GAP insurance. She’d had the car for roughly 16 months and lost control and hit a tree. The car was totaled. The GAP insurance paid less than $1000, and she was left to pay I believe $2500 on a vehicle that was totaled. When the GAP insurance was explained to her, her understanding was that in such an event, the GAP would cover anything her primary insurance didn’t. I never understood why the GAP didn’t pay the remainder of her loan. Any insight into that, just out of curiosity?

 

[adjusterjack]

When the GAP insurance was explained to her, her understanding was that in such an event, the GAP would cover anything her primary insurance didn’t.

That seems to be the implication wherever I read about it.

I never understood why the GAP didn’t pay the remainder of her loan. Any insight into that, just out of curiosity?

No. Not without reading her policy and getting the details of the claim.

 

[HerVoice]

So I have another question on this. The vehicle was deemed a total loss. The insurance company is offering $30 less than payoff (roughly $11,400). I’m telling her to take the offer, but she is insisting that she can get more. She feels that the insurance company should at least give her a couple thousand more so she can get something else to drive, and that since the other driver was at fault that she is “owed” more money to replace her vehicle. Her boyfriend keeps telling her that he has dealt with insurance lots of times and you just need to know the laws and that she should get an attorney. I feel that the offer is more than fair, and I fear that if she tries to fight this for more money, she’ll end up in a far worse position.

 

[Just Blue]

So I have another question on this. The vehicle was deemed a total loss. The insurance company is offering $30 less than payoff (roughly $11,400). I’m telling her to take the offer, but she is insisting that she can get more. She feels that the insurance company should at least give her a couple thousand more so she can get something else to drive, and that since the other driver was at fault that she is “owed” more money to replace her vehicle. Her boyfriend keeps telling her that he has dealt with insurance lots of times and you just need to know the laws and that she should get an attorney. I feel that the offer is more than fair, and I fear that if she tries to fight this for more money, she’ll end up in a far worse position.

sigh...

You mean the boyfriend that had his license suspended and wasn't supposed to be driving? Yeah...she shouldn't be taking advice from that irresponsible idiot.

She is entitled to be made whole (the current book value of the car)...she doesn't get a bonus. She should take the offer...she is damn lucky the is getting that much.

 

[cbg]

@adjusterjack