Can collision coverage be denied because of DWI?

Posted: Sat Jan 22, 2011 10:33 pm Post Subject:

If the carrier denied the claim then they sent a written denial to you outlining the reason for the denial. Have they done this? If they have, did they quote the portion of the policy that allows for a denial?
Can they deny coverage? Certainly, if it's excluded in the policy. They could deny you 1st party coverage even if someone else is DWI as you are allowing the use of the vehicle and therefore are still responsible for how its used.

Posted: Sat Jan 22, 2011 11:30 pm Post Subject: the letter from Insurance

This is what the letter says:
It is questionable whether XXXX XXXX was operating an
insured vehicle under this policy is an intoxicated condition or while her ability to operate such vehicle is impaired by the use of a drug (within the meaning of section 1192 of the NYS Vehicle and Traffic Law).
For this reason(s), and for other reasons which may become known, State Farm Mutual Automobile Insurance Company reserves the rights under the policy, including the right to deny coverage in its entirety.
Any action taken by State Farm Mutual Automobile Insurance Company, or any of its authorized representatives to investigate, evaluate, pay, defend, or otherwise adjust any claim presented, shall not waive any terms or conditions of the policy mentioned above, nor shall any such actions waive any of our other rights.
The Company does not intend, by this letter, to waive any policy defenses not stated above, but specifically reserves the rights to assert such additional policy defenses at any time.
If you have information or materials which may aid in the analysis of you claim for coverage, please contact us as soon as possible.
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Am I screwed?

Posted: Sat Jan 22, 2011 11:30 pm Post Subject: the letter from Insurance

This is what the letter says:

It is questionable whether XXXX XXXX was operating an
insured vehicle under this policy is an intoxicated condition or while her ability to operate such vehicle is impaired by the use of a drug (whithin the meaning of section 1192 of the NYS Vehicle and Traffic Law).
For this reason(s), and for other reasons which may become known, State Farm Mutual Automobile Insurance Company reserves the rights under the policy, including the right to deny coverrage in its entirety.
Any action taken by State Farm Mutual Automobile Insurance Company, or any of its authorized representatives to investigate, evaluate, pay, defend, or otherwise adjust any claim presented, shall not waive any terms or conditions of the policy mentioned above, nor shall any such actions waive any of our other rights.
The Company does not intend, by this letter, to waive any policy defenses not stated above, but specifically reserves the rights to assert such additional policy defenses at any time.
If you have information or materials which may aid in the analysis of you claim for coverage, please contact us as soon as possible.
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Am I screwed?

Posted: Sun Jan 23, 2011 12:43 am Post Subject:

That is not a denial.. it's a Reservation of Rights letter. A good ROR is also going to quote the portions of the policy/exclusions as well as all definitions.
You feel free to read the policy and ask the adjuster to point out the exclusions that may apply. Personally, if I received an ROR like that, I'd send a request in writing asking the adjuster to specifically point out what rights they are reserving. That ROR is pretty lame. It's purpose is to reserve certain rights... but it does not even name those rights.

Posted: Sun Jan 23, 2011 12:52 am Post Subject:

thanks tcope! That makes me breathe a little easier. They have pretty much told me that they would not cover the hospital costs but my primary insurance should take care of that. It's the cost of the car that I am most concerned about. Incidently, this car was only two days old! I'm going to show it to the Lawyer and see what he says. Geesh, if I had hair, I'd pull it out!!!!

Posted: Tue Jan 25, 2011 02:49 am Post Subject:

tcope is right as usual. It's a standard ROR letter. They are sent out anytime there are coverage questions that have to be looked in to. Basically saying they are not accepting nor denying liability, but they do have some questions that they will investigate... they want you to know that just b/c they are moving forward with working the claim does not mean they are accepting liability (or denying). Just a legal letter that means they are concerned about issues and will keep you posted as the progress w/ the coverage questions they have.

as Tcope stated, typically the ROR points out specific exclusions or policy wording that concerns the issue. I agree, its very ambiguous. Not a very good ROR, I'm surprised they sent it like that.

If you recently bought the car and you're daughter had permission to drive the car and unless specifically excluded (i didnt see that in your ROR) she should be covered. I do see problems arise if the young driver has been in the house several months and the parents don't add the kid to the policy save money, it's their leg to stand on to be denied based on material misrepresentation. Need to know more about the claim and details of your situation (apparently so does your company).

Did she have permission to drive your car? Does she live in your household? if so, how long? why is she not listed on the policy? Is she a regular driver in the household? Does she have her own insurance? Expect to hear these type questions... keep the forum posted on your progress. for now you only have a ROR letter, ie they are investigating.

Posted: Tue Jan 25, 2011 03:55 am Post Subject:

Thanks for the advice mbyork.
Yes, my daughter was listed as driver on my policy. She's been on it since she started driving. She actually just moved into own apartment but her mailing address is still at my house. I looked through my policy and it really doesn't say anything about excluding if there was an accident involving a DWI. It does talk about what happens if I was charged, or I guess my daughter with a DWI regarding insurance costs and that they could drop me. For now, I think I better just shut up and see what happens. I'm not sure what I'm going to do moving forward regarding insuring myself. I will see about removing my daughter from my coverage. She understands that she's on her own for screwing up. I thank God that she, or anyone else wasn't hurt or killed. But she needs to feel the pain for being so stupid. I can't imagine how much she's going to have to pay, once she is able to drive again!

Posted: Tue Jan 25, 2011 04:01 am Post Subject:

I don't know you or your daughters situation but I applaud your action of "tough love". Time to grow up and understand we all need to be responsible for our own actions. That is not to say we can't get a helping hand though.

Posted: Tue Jan 25, 2011 03:40 pm Post Subject:

Thank you tcope. Not to get off subject, but my daughter, actually both of us, have been through quite a bit the last few years. My wife, Kayla's mother, passed from a long long struggle with ALS a couple years ago. My daughter witnessed her Mother dying for most of her life. Not an easy thing for anyone. I am not making excuses, but the poor kid needs more help than I can give her and this may be the kick in the butt to get her there. She is actually listening to me about joining the service. I think that may do her a world of good and help her in a direction that I have not been able to do. If anyone out there has a manual on raising an emotionally disturbed teenager, I sure would appreciate forwarding it to me!

Posted: Thu Jan 27, 2011 03:56 pm Post Subject:

if your daughter is listed on the policy, I can't see how they could deny coverage unless the policy specifically states it will not cover loss due to driving while intoxicated. Ive personally never seen this in a policy, but your state may be different than mine. Call and ask your agent or adjuster, have them show you exactly where to find it in the policy. ie. Part IV Car Damage Coverage, pg 20, Section X Exclusions, # 3.

best wishes to your family. Although I would never condone driving under the influence, we have all done stupid things. Hopefully lesson learned and you both can soon move on to better things.