Tried posting this in the insurance forum w/o any luck so maybe someone here can assist me

Quick overview:
Car is insured by person A
Car is title/registered to person B

Car is totaled and once it got to the total loss dept. they started questioning the ownership vs. insurer. Insurance comp. is denying claim in its entirety per their fraud disclaimer stating insurer "intentionally misrepresented facts to purchase the policy" therefore committing fraud so policy is voided....

Can they legally deny the claim due to owner and insurer not being the same person? The car/claim is not mine but I'm assisting a family member in this matter and just wanted to see if anyone here has heard of this before or any suggestions. I've filed a complaint with the CA insurance board and have a few appointments with attorney's to see if they can take care of this case.<O></O>

I know some of you are asking why owner is different from insurer but in short the daughter gave the car to mother and mother never changed ownership. Car was given 7/2012 and accident occurred 5/2013. Same insurance company insures their entire family but on different policies. Premiums have been paid to this insurance company for a total of 4 years (3 by the daughter and 1 by the mother).<O></O>

Anyone in the field have a guess on what the outcome will be?<O></O>

 

You sometimes see this with subleasing schemes aka leaseswap etc. Here, the owner or original leasee is responsible for the car, the subleasor is supposed to get ins, usually don't, then an accident occurs. Ins co routinely void these policies bc the practice of subleasing is prohibited in most cases. Be sure the ins co knows this was not a sublease thing, rather a family member that was allowed to use the car.

 

Yeah the insurance comp knows that the daughter owned the car but mother was the person with physical possession so she insured it under her name. Both mother and daughter have insurance with the same company so they know everything.

I'm really surprise they denied the claim so looking for suggestions

 

You need to hire an attorney (insurance companies pay more attention when a letter is sent from a law firm/attorney) and have him/her disclose the facts as there are circumstances that the insurance may not know, or are quick on the trigger to deny the claim due to a high rate of insurance fraud. Here in NJ, insurance companies will only allow the vehicle owner to insure a specific vehicle however you can add authorized drivers to the policy. Good Luck

 

A bit different opinion here...

I would just ask the insurer to explain in writing the policy language or statute that was violated and specifically why it is not covered, to be certain. If it is not covered, it is not covered and adding an attorney to it isn't going to change the law or policy, just line their pockets with more of your money. If after you get a clear statement from your insurer it does not seem right, then certainly seek advice on the law and policy language from credible counsel.

In many cases, policies have clear language about timing and the extent to which you are required to notify them...Good luck...

 

I have used Mike Bidart - one of the best bad faith Insurance attorneys in the business.

I have used him with an excellent result.

Mike Bidart
600 South Indian Hill Blvd.
Claremont, CA 91711
Phone: (800) 458-3386
(909) 621-4935

http://shernoff.com/attorneys/michael-bidart/

 

I was always told the insured had to have a financial risk to be the insured. So, in your case the person that holds (name is on the title) the title would be the only person that could be the insured.

 

The exact language the used to decline the claim was "intentionally withheld or misrepresented facts" due to the mother not disclosing the daughter was the owner. Legally I would assume they have to prove she "intentionally" did it but I have appts with a few lawyers to see if that is correct and what the chances are she can win the case.

 

Thank you. I will give Mike a call today and see if I can arrange anything over the phone.

 

Just be aware...Just as the Insurance company has the burden of proof that the information was willfully withheld...The plaintiff (you) will need to prove the bad faith intent. Typically referred to as "arbitrary and capricious" actions. You only need to prove or allege bad faith if you are trying to get extra-contractual damages. Sounds like you have a coverage issue which needs to be resolved. Good luck sorting it out.

 

This really is an interesting dilemma - interested in seeing how it all plays out. One problem I see is if the car is totaled to whom does the insurance company make payment in settlement of the claim. They would want a release from the title holder but the payment should go to the insured...but i would think this could be worked out if you get all the parties in a room.

 

Talking with my wife, who has been in the insurance business 25 years, say you will be screwed. You might be able to go after the agent EE&O policy but the carrier will not cover this claim.
For an example. I know you are a bad drive and I want to take out a insurance policy against you. I can't do that. I will have no financial interest if you wreck your car.

 

I spoke to a few lawyers and overall they've said my mother in law has a case due to a few legal reasons but the major one was the insurance com claim that she intentionally misrepresented the ownership to them.

The overall consensus is she didn't intentionally do anything to defraud them of any financial gain or did she gain anything by transferring the car from the daughter to herself. She actually ended up paying the same insurance company more $ to cover the car under her name vs the daughter.

There also is a grey area concerning ownership of the car and if legally the only way a person is considered the legal owner of the car is when the DMV shows title being transfer. The car again was given to mother from her daughter and in short even if title was never transferred the mother did have a financial interest in the car...

I'm not a lawyer or anything but it just doesn't seem right a insurance company can take the premium and wait until something happens to reject the claim. They had the opportunity to verify what they needed to do and if they felt there were any issues they could have cancelled the policy before then.

It's going to be awhile before there will be a definite outcome in this case so ill repost again once that happens.

Thanks again for everyone's input good or bad.

 

Research the gift tax rules/regs before you start making that claim...but the IRS is so busy keeping the tax exempt folks clean they might not be concerned going after the daughter for gift tax return.