Expert: Ron Cercone - 10/14/2009

Question
My daughter canceled a policy on a car that her and her husband had. I had cosigned the loan on the car so I was the owner and my son in law was the co owner. The policy was canceled at 11:00am by my daughter because they had separated and my son in law had the car.My daughter was the name insured on the policy. My son in law had an accident at 9:00pm the same day. The car is a total loss and the insurance co. says that it is not covered.My daughter never signed anything stating she wanted to cancel the policy.We cannot get a hold of the adjuster to even get any information on the claim. Can you give some advice on what to do now.Their is a gap policy on the vehicle also but they need a letter of denial from the insurance co.

Answer
First read the policy about cancellation provisions and about who is an insured. Also read the loan papers about insurance provisions and your rights as a cosigner. I would think that the insurer would still have to pay the lender since they have a right to be notified by the insurer and probably have a "grace period" to find other insurance or pay the premium themselves. If not, the lender may have other insurance that kicks in up to the amount they are owed on the car. Also consider the eBook at UClaim.com entitled Denied Claims for Automobile. It will teach you the "legal" steps an insurer has to go through to properly cancel a policy. (And they don't need your cancellation in writing.)