I was involved in an accident in which my car was damaged but no-one was hurt. I received a letter from the other driver’s insurance carrier saying that the insurance carrier was disclaiming. There was a bunch of legal jargon I didn’t understand in the letter. How will I fix my car?
It is probably too early to tell if insurance will pay to fix your car.
An insurance company will send a letter of disclaimer if it believes that it is not responsible to pay for the loss. The usual reasons that an insurance company will not pay for a loss is (1) the insured did not pay his premium, (2) vehicle was being used without the owner’s permission (such as a stolen vehicle), or (3) the owner of the car or someone who had the owner’s permission to use the vehicle was driving while intoxicated and caused an accident. There are some times in which the insurance company will be liable even if one of those three circumstances occurred.
Failure to Pay Insurance Premium
For example, even if the other driver did not pay his insurance premium, the carrier still might be liable. Under New York law, a carrier must notify the insured that the policy is canceled. The carrier has the responsibility to send the notice of cancellation with certain language and in a certain font size! If the insurance carrier does not follow the exact letter of the law, the policy is in effect.
Vehicle Use without Permission
Second, the car could have been used by another licensed driver living in the same household as the insured. The insurance company would be liable. It would all depend upon circumstances in the home of the insured. For example, did the insured leave keys to the vehicle in a common area in the home about which all licensed drivers in the home knew the key’s location? Prior to the accident, did the insured lend his or her car to the same person that was driving at the time of the accident? These factors would be very important to determine the liability of the insurance company.
Impaired Driver
Third, even if a witness said they saw an intoxicated driver, the carrier may still be liable. If the police never responded or police never tested the alleged drunk driver, the insurance company may not be able to disclaim.
Collision Claim
In most instances, we advise our clients to put property damage claims through their own insurance company through a “collision endorsement” in their own policy. Even though a person may not want to put a claim through their own insurance company for an accident that was not their fault, your own insurance company has the resources to fight the other insurance company. If you have a $1,000 deductible in your auto insurance policy “collision endorsement,” after the first $1,000, your own insurance company will pay to fix your car. Then your insurance company has a right of subrogation.
A right of subrogation means your own insurance company will fight on your behalf. Your carrier fights the other insurance company. Your company can recover money your insurance company paid to fix your car as well as your $1,000 deductible.
If you have no “collision endorsement” in your insurance policy, you can take the driver and owner of the vehicle that caused the accident to small claims court. I would also advise you to file a complaint with the insurance department to investigate the validity of the disclaimer.
By James Santner, Esq.
If you have questions about a similar situation, feel free to contact us. Consultations are free and there is no fee unless we win.