Not at fault total loss-at fault party’s insurance denied coverage for business use

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Mar 26, 2019
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#1
I was involved in an accident two weeks ago. Where a kid ran a stop sign and tried to make a left in front of me. Not only is my car likely totaled (5 airbags deployed) but I was also hurt in this accident.

His personal auto insurance finally got back to me and said they are denying coverage because they received information that he was driving for business use under direction of his employer (fast food restaurant).

I contacted the restaurant corporate office and they opened a claim with their liability insurance. The risk manager gave me contact information for a representative at Sedgwick. When I spoke with the representative he said their policy only provides excess coverage and employees are required to carry their own insurance. I’m supposed to talk to the assigned adjuster tomorrow.

I do not have collision coverage on this vehicle-if so I would have already used it and let my insurance handle recovery. My questions are: at this point should I just pay all vehicle damages out of pocket and take the at fault driver to small claims court? And would you recommend getting an injury attorney involved?
 

AMA

Verified Member
Dec 11, 2014
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#2
You have no insurance on your automobile at all? Doesn't your state require it?
 

Dwayne Coward

Administrator
Staff Member
Director
Apr 13, 2016
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St. Louis
#3
I was involved in an accident two weeks ago. Where a kid ran a stop sign and tried to make a left in front of me. Not only is my car likely totaled (5 airbags deployed) but I was also hurt in this accident.

His personal auto insurance finally got back to me and said they are denying coverage because they received information that he was driving for business use under direction of his employer (fast food restaurant).

I contacted the restaurant corporate office and they opened a claim with their liability insurance. The risk manager gave me contact information for a representative at Sedgwick. When I spoke with the representative he said their policy only provides excess coverage and employees are required to carry their own insurance. I’m supposed to talk to the assigned adjuster tomorrow.

I do not have collision coverage on this vehicle-if so I would have already used it and let my insurance handle recovery. My questions are: at this point should I just pay all vehicle damages out of pocket and take the at fault driver to small claims court? And would you recommend getting an injury attorney involved?
If it was me, I would consult with an attorney to determine my legal options. An attorney would be able to advise you if the employer has any liability for their employee not carrying the required insurance. Small claims is an option if the claim is under the limit allowed in your state.

You have no insurance on your automobile at all? Doesn't your state require it?
If all he/she had was liability without any additional medical coverage, it will not cover his/her cost.
 
Dec 11, 2016
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#4
What an awful situation. Two thoughts 1) Just because you received a first denial from the employee's insurer, and the business's insurer, it doesn't mean you have to accept it - there should be an appeals process. 2) it wouldn't hurt to do a consultation with an attorney.

In the meantime, do what you need to do to heal and take care of yourself. Nothing about insurance is instant, and if you're like most people, you still need a vehicle while all of this gets resolved.
 

weihlac

Verified Member
Jun 30, 2017
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#5
You should consult with an attorney. It is likely that the damages you suffered, both collision and medical will exceed small claims court limits. An attorney can guide you to the best result for you. Your case is complicated by the "business" use of the driver, plus the driver who hit you probably has no assets to pay any judgment if his insurance company is allowed to deny the claim. So even if you prevail in court against the driver, without his insurance you will not receive much if anything. Remember that insurance companies job is to collect premiums and minimize (deny) claims. You cannot navigate this maze on your own successfully.
 

Neil Maley

Moderator
Staff Member
Advocate
Dec 27, 2014
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New York
www.promalvacations.com
#6
You have no insurance on your automobile at all? Doesn't your state require it?
She doesn’t have comprehensive coverage (collision) so the car wouldn’t be replaced.

I would suggest you contact an attorney as weihlac suggested. He’s exactly right - the other driver likeky has no assets so there would be nothing to be awarded. An attorney would be the best one to know how to sue all parties involved.

You may have health repurcussions for a very long time from your injuries - let an attorney represent you.
 
Likes: VoR61
Aug 9, 2017
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#7
I was involved in an accident two weeks ago. Where a kid ran a stop sign and tried to make a left in front of me. Not only is my car likely totaled (5 airbags deployed) but I was also hurt in this accident.

His personal auto insurance finally got back to me and said they are denying coverage because they received information that he was driving for business use under direction of his employer (fast food restaurant).

I contacted the restaurant corporate office and they opened a claim with their liability insurance. The risk manager gave me contact information for a representative at Sedgwick. When I spoke with the representative he said their policy only provides excess coverage and employees are required to carry their own insurance. I’m supposed to talk to the assigned adjuster tomorrow.

I do not have collision coverage on this vehicle-if so I would have already used it and let my insurance handle recovery. My questions are: at this point should I just pay all vehicle damages out of pocket and take the at fault driver to small claims court? And would you recommend getting an injury attorney involved?

If the employer did not comply with the terms of his commercial insurance coverage by verifying and documenting that the employee had coverage- it may well be that the employer is liable. You need an attorney.
 
Mar 15, 2018
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#8
My belief is that this is not a consumer issue but a legal matter, and there's likely little advice we could offer. Ditto to the others who suggested consulting an attorney.
 
Likes: Neil Maley
Dec 17, 2018
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#9
Since the kid was driving for his employer (a delivery, I'm assuming?), there is a STRONG argument that the company can be held liable under respondeat superior. Go talk to an attorney STAT. I suspect a personal injury attorney would jump at this case (my firm would take it, almost certainly... but a lot depends on how much they think they can get vs how expensive the case will be, but since there is an employer involved, I don't think you'll have problems finding someone).
 
Jun 12, 2019
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Couple of thoughts here. Do you have uninsured motorist? In CA, there is 2 types of uninsured motorist. One is for bodily injuries and one is for property damage. In CA, you would have to reject the UMBI coverage in writing, otherwise you would have coverage up to your BI limit. Uninsured motorist property damage is the second insurance that is offered. This one is completely optional but some brokers automatically quote premiums with this coverage since the premium is very low.

For the third party who caused the damage, You need to inform Sedgewick that the primary carrier has denied coverage and the excess should take over at that point. At this point, I will agree that you should get an Attorney. I had a Lyft Driver Rear end me a while back and even though I am in the business, trying to deal with Third Party Administrators like Sedgewick is a pain. I got an attorney and the insurance company behaved.
 
Oct 10, 2015
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#14
Both the driver at fault and the owner of the car that person was driving are liable to you for injuries, damage to your property, and damage to your car. If one cannot pay then the other may have to pay it all (the buzz word is "jointly and severally liable." Minus a fraction depending on how much you were also at fault, in some states.

His insurance company has the job of defending him and paying to you whatever a court awards to you (or the insurance adjuster agrees)., up to the limits of the policy. His insurance company has no relationship with you although for convenience you would file a claim with his insurance company.
 
Oct 10, 2015
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#15
Your attorney may determine that it is worthwhile to add the driver's employer to the list of persons to make a damage claim against.Even though the employer's insurance company may cover the excess costs (the buzz word is "is secondary") if the driver (who is "primary") is unable to pay his share then the employer might be liable for paying more.
 
Jun 12, 2019
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#16
Your attorney may determine that it is worthwhile to add the driver's employer to the list of persons to make a damage claim against.Even though the employer's insurance company may cover the excess costs (the buzz word is "is secondary") if the driver (who is "primary") is unable to pay his share then the employer might be liable for paying more.
In my experience, Attorneys would jump at the chance to take a undisputed liability case that involves a business with insurance. One of the questions that they usually ask to the party at fault is if they were working when the accident occurs.