Shopping for car insurance is not as fun as a trip to the mall, but it poses more risks. The companies work hard to limit what they pay out in benefits. It is important that you read your policy carefully in order to understand what is covered. Insurance companies are famous for having legal loopholes that can cost you dearly in the event of an accident.
For example, one loophole that many people are unaware of is the practice of limiting coverage when two unmarried cohabiting adults attempt to combine their car insurance. A recent case called Bell v. Progressive Direct Insurance was issued by the South Carolina Supreme Court. That case involved a serious car accident. The plaintiff was a passenger when the accident happened. The driver in a different car was at fault. The at-fault driver but did not have enough insurance to pay for all the damages the plaintiff incurred. The driver of the car the plaintiff was in had decided not to purchase underinsured motorist coverage, (a really bad idea by the way). The plaintiff sought to recover benefits from the the auto insurance policy he and his fiancée had purchased together.
The couple lived together and had a child together. But were not legally married. To save money, the plaintiff had dropped his personal insurance policy and had his fiancée add him to her policy. The plaintiff was listed under the “drivers and household residents” section of his fiancée’s policy. The insurance company denied benefits because he was not a legal spouse or relative.
The court allowed the obscure language of the policy to stand. It sided with Progressive Direct Insurance, stating that the insurance policy language did not allow for benefits to another unmarried adult living in the same household. The way the policy was written it did provide the plaintiff the legally required amount of liability coverage if he were to cause an accident. However, the fine print policy language did not give him the same coverage it gave his finacee in the event of damages caused by an underinsured motorist.
Obviously couples living together without being married need to review policy language for exclusions such as the one in the Bell case. All then insurance companies use this fine print and court’s let them get away with it. One lesson is that you cannot assume that a policy you have offers full protection to two cohabiting adults.If you have any doubts about the validity of your coverage, it is best to err on the side of caution and maintain two separate policies until you are legally married.
Obviously there are many other fine print issues that you need to be careful about so review, or have your lawyer review and explain, your policy to make sure you understand the various types of insurance coverages and have the protection you want and need.
Contacting an Attorney
The attorneys at Holzer Edwards are dedicated to representing Idaho residents who wish to seek monetary compensation for injuries or property damage caused by the negligence of others. Please call (208) 386-9119 or toll-free at (888) 490-0992 for a free consultation.