Accident Surcharges - if liability claim paid while friend is driving ?

Jun 10, 2018

  1. stevebryant
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    stevebryant New Member

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    Two related questions:

    Are "Accident Surcharges" treated differently if a claim was paid while a friend was the driving the car ?

    Related . . can I ask the to have my friend's insurance to pay the claim if an accident occurs while he is driving my car ?
     
  2. djs
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    djs Super Moderator Moderator

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    This answer may change by state and I'm not 100% sure of Minnesota, but in general there are general rules for claims to help avoid passing the 'buck' when it comes to claims between insurance companies. Generally speaking:

    - Claims are paid by the cars insurance as primary. Not the drivers, but the cars. Whatever policy that car is listed on is primary, it pays first. Additional coverage may apply from the policy that the driver is listed on in the case of liability, but the policy limits are concurrent, not stacked. For instance, if the car policy is $15k/$30k and the driver has $25K/$50K and the liability claim is for $100K for a single individual, the car policy would pay $15K, the drivers policy would pay $10K and then the driver / car owner would be responsible for the other $50K still.

    - Claims are rated to drivers, not cars. So even though the cars policy pays the claim, the surcharge gets added to the drivers policy, not the car owners policy. In some areas, you may lose a discount or 2 for things like claims free, but these are usually very minor (in the big picture of things).

    Of note, all this goes out the window if the friend was not a permissive driver but deemed a regular driver. Not usually an issue if they have their own car and their own policy though.

    Dan
     
    djs, Jun 10, 2018
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  3. adjusterjack
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    adjusterjack Guru

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    Generally, no.
    Your car.
    Your policy.
    Your insurance pays.
    Your policy gets the surcharge.

    You can ask, but your friend's insurance will just deny the claim.

    Your friend is defined as "an insured" on your policy and your policy covers him and you for any accidents he causes.

    There is no such limitation in the personal auto policy. The coverage is for "any person using your covered auto."

    Where the problem lies is if the use by a regular driver was concealed from the insurance company perhaps to avoid paying a higher premium or some such. The claim might be denied and the policy rescinded. Depends on state law and whether or not the concealment was "material" to the underwriting of the risk. That type of denial is complicated and risky for any insurance company and insurance people think long and hard before doing it.
     
  4. stevebryant
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    stevebryant New Member

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    I think I have received conflicting answers on this question . . . please clarify, does the Car Owner's policy get the Accident Surcharge, or does Driver's policy get the Surcharge ?

    I understand this can be affected by circumstances. In this case the driver (my friend) is in the same household. She has her own car and a separate policy. She had my permission to drive my car . . her car was available for use . . we were traveling together in my car. She is not named on my policy. So my policy will pay, but whose policy gets the "Accident Surcharge" if there is one ?
     
    Last edited: Jun 11, 2018
  5. adjusterjack
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    adjusterjack Guru

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    The car owner's policy.
     
  6. stevebryant
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    stevebryant New Member

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    Thanks . . . My insurance company just confirmed that her accident is my problem regarding accident surcharge if any. I think I will ask her to take me our for dinner tonight.
     
    Last edited: Jun 11, 2018
  7. djs
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    djs Super Moderator Moderator

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    Normally the driver is rated for the surcharge. If the car is, then simply change carriers after the 'car' is rated since there will be no method to track fault in this situation. Or sell your car and get a different one, the accident would go away. Doesn't happen that way at all.

    I've seen many people state this incorrectly. Most agents, who have dealt with it many times will get it right, but if you talk with people on claims, they frequently assume (as many people do) that accidents are rated to cars. Might happen in some states, but not in any state I've worked (which is a limited number, but substantial sample).

    Let me state this without any doubt. In California, accidents are rated to the driver, not the car (or the cars policy). Any other state, I don't know of any that operate otherwise, but there is a chance.

    Any rating change to the cars policy without a listed driver being found at fault is a claims incident, not an accident surcharge. I do know some carriers in some states give a true claims free discount which can be lost. This may be what your carrier was referring to.

    Dan
     
    djs, Jun 11, 2018
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  8. stevebryant
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    stevebryant New Member

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    My adjuster said the accident charge will go against my Vehicle policy for the accident with my friend driving. From the differing responses in this forum, I will only know for sure when it happens. Thanks.
     
  9. fed up
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    fed up Super Genius

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    How close is your friend? Most insurers will discount for multiple cars on 1 policy so you could save some money in premium by combining the 2 policies into one.
     
    fed up, Jun 13, 2018
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  10. adjusterjack
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    adjusterjack Guru

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    At least.

    :yes:
     
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