Switched insurance, old insurance not cancelled, accident, questions

[adjusterjack]

taking her suggestion to drop collision coverage on that vehicle.

Her suggestion?

Yikes.

I'd run far away from that agent.

 

[SoCal Merc Agent]

There is nothing in the policy that says you can't have two policies

Actually, depending on the State you are in, this is not exactly true. Most have a question on the application asking if there is any prior coverage in place or asking when the coverage they are replacing expires. The key is that if you have both policies in place, legally they both have a duty to defend or provide service. Legally, both could be liable for services and the insured has a duty to notify the carriers of concurrent coverage so they can address their exposures.

Regardless, you CANNOT make claims for the same damage/loss with one carrier, then the other. Also, remember that every carrier has a list of duties/conditions placed upon the insured and one is the amount of time you have to report the loss to the carrier. Should you exceed that time, the carrier will usually still honor your claim, but it gives them an out because if you violate a material condition within the policy, the carrier can seek dec relief from it's obligations if you hinder their ability to handle things in a timely manor. It doesn't happen often, but it does give the company certain rights you may not know, or have thought, about.

 

[SoCal Merc Agent]

Hi all,

Thanks to the people here for trying to help people out. I switched insurance carriers several months ago. I thought I cancelled the old insurance when I switched, but it looks like I didn't. My daughter got into an accident yesterday where traffic stopped in front of her and she didn't stop in time, her fault. 2014 Chevy Equinox. My new insurance does not have collision coverage for this vehicle, my old insurance did. How is this handled? I meant to cancel the old, but didn't. I already contacted my new insurance company.

How should I handle this? I am guessing the damage to our car is several thousand dollars, maybe totalled, not sure. The premium on the old policy is probably about $1500 for the period that I had the duplicate coverage. Before this accident, I was hoping to be able to get that back if I proved to them I had the same coverage, but now of course since I have collision coverage on that one, I'm hoping I'm covered?

I hope someone could help me with some advice. Thank you very much!

The simple answer is file the claim with both companies and let them figure it out. One thing is fairly clear in that you paid for 2 policies...coverage should be found within one of the 2. Also, the agent who told you to drop Collision coverage, I agree with the other advise...run from that agent.

 

[adjusterjack]

There is nothing in the policy that says you can't have two policies.

Actually, depending on the State you are in, this is not exactly true. Most have a question on the application asking if there is any prior coverage in place or asking when the coverage they are replacing expires.

I wasn't talking about the application, just the policy. All auto policies have the "other" or "duplicate" coverage provision, which suggests that it's a common occurrence that gets handled by the "pro rata" method. There is no provision prohibiting the existence of another policy.

 

[SoCal Merc Agent]

I wasn't talking about the application, just the policy. All auto policies have the "other" or "duplicate" coverage provision, which suggests that it's a common occurrence that gets handled by the "pro rata" method. There is no provision prohibiting the existence of another policy.

While you are technically correct regarding how the claim might be handled, I am not so sure about the statement "All auto policies have the "other" or "duplicate" coverage provision..." In my tenure as a prior claims rep, underwriter and licensed agent, I have learned that the word "all" is a dangerous thing to toss out. The only time I do is when I say "all" policies are not written the same.

And the application for the second carrier has everything to do with this question. If the carrier knows there is other coverage, they don't want to be co-writing the risk. More importantly, while having two auto insurance policies is legal, filing the same claim with two different insurers isn't and is considered insurance fraud in many circumstances.

Now if you disclose this at the get go to both carriers advising of your error, the carriers will work that out. But if you don't disclose it or made a material misrepresentation on the application, that is where the trouble wills start.

 

[adjusterjack]

I am not so sure about the statement "All auto policies have the "other" or "duplicate" coverage provision..."

I'm comfortable saying it and would defy anybody to show me an auto policy that doesn't have words to that effect.

More importantly, while having two auto insurance policies is legal, filing the same claim with two different insurers isn't and is considered insurance fraud in many circumstances.

I'm glad you qualified that with "many" because in many circumstances it's neither illegal nor fraud.

But if you don't disclose it or made a material misrepresentation on the application, that is where the trouble wills start.

That depends on how the questions are asked. Here I'll qualify my statement to say that some, or many, insurance applications are not specific enough about the question. Take the ACORD California auto app for example.

ACORD 0090 CA 2015-12 (ric-ins.com)



I don't see enough specificity there to create a material misrepresentation out of a duplicate policy when the insurance company builds in a fail safe with the pro-rating of duplicate coverage.

 

[fed up]

I dont see why people are getting fired up over the situation of 2 policies and one accident. The claim goes to the original carrier and the stupid client shuts his mouth about additional carrier. Policy holder quits carrier #2 and let's the paid premium serve as a reminder to his bank account that he lucked out by being an ***

 

[adjusterjack]

That would be fraud. This is from the ISO auto policy form.



All (yes, all) auto policies have similar wording.

 

[SoCal Merc Agent]

I checked the horses neck....no pulse.