Insurer refusing to process my son's claim because we own the title

[Russell Nelson]

We bought a car for our son. The vehicle’s title is still in our name, but he bought the insurance policy and has been paying the premiums for six years. Now the car has been totaled and the insurer is refusing to process the claim unless he gets the car titled in his own name. We cannot change the title until December when we will be out of bankruptcy (Chapter 13 due to medical reasons). He needs a car. The adjuster is saying that buying an insurance policy on a car where someone else owns the title is illegal. Is this true? I can’t find anywhere that says that. I suspect the agent sold my son a policy without ever checking the title. What should we do?

 

[STIBROKER]

the car has been totaled....buy a used car

 

[Markthebroker]

It's an issue of insurable interest. You can't insure something you don't own. If your parents own it, your grandparents, friend, neighbor, penpal, bff, whatever, that's great, but you still don't own it.

Could I buy an insurance policy on your house and collect if it burns down? Think about it. No. Could you collect on an insurance policy I bought on your house? No. It doesn't matter what our relationship is. You own it. I don't.

Was it the agents fault for not checking title, meh, that's a long shot. Was it your son's fault for not telling the agent it wasn't his car? Yes.

 

[Tahoe Ray]

I've found it all over the internet

Now there's your problem...

 

[Markthebroker]

Thanks for the response, but my son bought his policy in good faith and has paid on it for 6 years. So the insurer can simply skate in a situation like this? And it is incorrect that you cannot buy a policy on a car you don't own. I've found it all over the internet. There are 2 versions. One is a non-owner policy that is liability only, and the other is a policy that pays you as well.

Your son bought a policy for a car that he doesn't own. I don't know if good faith would be a fair description. I don't know if "skate" would be a fair description of what the carrier is doing either. But if that's how you want to look at it, yes, that is what is going to happen.

Yes, you found some articles about non-owner policies. I write a number of those. Those non owner policies are for liability, not the value of the vehicle, which is the issue here. Reread the article, even if that's what you or he bought, the vehicle wouldn't be covered. You can read all the articles you want - that isn't what your son bought, even if it did cover the vehicle. I don't know what else you found, but it probably doesn't apply to you either.

Feel free to google all the articles that you want, but you are dealing with a group of people here that do this for a living, and you are getting a pretty consistent message from all of us.

 

[Markthebroker]

They won't process the claim. So they took 6 years of premiums, well over a hundred dollars a month, and now are refusing to pay a $3,600 claim.

Bingo.

 

[Markthebroker]

Yes, everyone on here that has responded is an experienced agent.

We aren't telling you how we want it to be, or how it should be, just how it is.

 

[Markthebroker]

Well, your son purchase an indemnity (security or protection against a loss or other financial burden) product for something he didn't own. Neither you nor your son disclosed that to the agent, nor considered the fact that one probably can't purchase an indemnity product on something one does not have a financial or insurable interest in.

A quick internet search, or asking the agent, would have told you that immediately.

If you want to use that mistake as an excuse to never trust an entire industry - god bless.

Imagine he hadn't tried to get insurance on your car. Imaging it was something else. What if he had tried to open a bank account or medical insurance in your name? He'd probably be in jail right now.

 

[Tahoe Ray]

Thank you for responding. I will never trust the insurance industry ever again.

That's a ridiculous way to look at it.

Your son buys a policy on something that he doesn't own (and thus can't insure) and it's somehow the entire insurance industry's (made up of a myriad of risks) fault?

Sometimes people just screw up. For your son, this is one of those times.

 

[STIBROKER]

its like me taking a life insurance policy on Trump......