Expert: Bennie719 - 5/14/2009

Question
I was buying a truck from my mom, which she kept insurance on and I paid her.  We put the truck in my name because she was filing bankrupcy and could only have one vehicle in her name.  I was under the impression that I had full coverage insurance.  I've been driving it since September.  I was just recently in a accident.  The insurance company says they won't pay for it because the truck is in my name.  We have been paying for full coverage and now my truck won't be fixed.  Is this right?

Answer
Hi Brandy,
Among the companies that insure 85% of the vehicles, there is a clause in their policies stating that the only cars on the policy must be owned by the named insured or the named insured and spouse.

There are other companies that will insure a vehicle for you and add
an endorsement stating that you are not the owner.

Your case is different because at the time the truck was purchased
your mother was the owner and had every right to add it to her policy.

I have seen situations like yours many times.  There are two ways to settle such a loss.  The most common way they are resolved is that the insurance company will decide to pay the claim because it was listed on the policy and they had been paid a premium for the coverage.  After paying the claim, they will tell the insured that the vehicle can no longer remain on her policy because it is not an "owned" vehicle and you would be forced to secure your own insurance policy.
The second way is to refund all the money collected since the date that the vehicle became registered to you and remove it from her policy as of that date and then deny the claim.  I have never seen
a situation handled in that manner.

In most states, the Department of Insurance and the Department of Motor Vehicles will seriously frown upon that action since a premium was paid, they expect coverage to be provided.

Some states have a very strong Commissioner of Insurance and others have a commissioner who is just a puppet for the insurance companies.

You need to talk to your mothers insurance company and tell them that the have an obligation to fulfill since they have been accepting  premiums to insure the truck.  If they still deny to cover the accident, you need to file a complaint with the department of insurance in your state.

As long as you DO NOT have an attorney, the department of insurance
can assist you on this claim.  If your state has a "weak" commissioner, then you won't get much help.  If they are able to help you get the claim covered that would be great.
If they can't provide enough help to get it covered, then you and your mother need to consult with an Attorney.

I hope that you find this information to be of help.  Your feedback by rating my response will be appreciated.

Sincerely,
Bennie
San Francisco Bay Area