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Tina
Tina, Lawyer
Category: Legal
Satisfied Customers: 8775
Experience:  JD, BBA Over 25 years legal and business experience.
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Can a auto insurance company be held liable beyond what the

Customer Question

Can a auto insurance company be held liable beyond what the policy obligations state for insuring an unlicensed driver and not confirming that she was licensed?
Submitted: 2 months ago.
Category: Legal
Expert:  Legal Expert Justin replied 2 months ago.

Hello! My name is ***** ***** I'll be the Expert assisting you today. What state are you located in?

Expert:  Legal Expert Justin replied 2 months ago.

Do you know if the unlicensed driver is over 18?

Customer: replied 2 months ago.
she is 24
Expert:  Legal Expert Justin replied 2 months ago.

The insurance company will not be able to be held liable for more than their policy limits; even if the driver does not have a license. In fact, if that was a term of the policy, the insurance company may be able to void the contract and escape liability all together. What state are you located in? Do you have uninsured motorist coverage?

Customer: replied 2 months ago.
We believe she lied on the insurance application and the insurance company did not vet her. We are in Maryland
Customer: replied 2 months ago.
The insurance company has admitted liability. We are trying to negotiate a settlement with them
Expert:  Legal Expert Justin replied 2 months ago.

In that case, the policy limit should stand. It is in your best interest not to alert the insurance company about her not being licensed (lest they try and escape liability). Do you have uninsured motorist coverage? If so, you can file a claim with your own insurance company if the amount of the settlement reaches the insurance cap.

Customer: replied 2 months ago.
They already know she has no license since it is in the report filed by the sheriff's department, She has a learner's permit only and was driving without a licensed driver with her, illegal in our states. She was cited for this at the scene of the accident and other charges are pending.. They have known the details of the accident for over 3 weeks.The insurance company wants to settle for a small amount of money and we are trying to find a way to increase the settlement.
Expert:  Legal Expert Justin replied 2 months ago.

Your best chance to increase the settlement is to hire an attorney. Most attorneys will do personal injury work on a contingency basis, so it should cost you anything up front. Also, the attorney should only take a percentage (usually 1/3) of any amounts over the initial settlement (since you have already got an offer from the insurance company, the lawyer should not take a share of that).

Unfortunately, insurance companies just won't take a person seriously if they are not represented by counsel. Do you think a fair settlement would be over the policy limit? If so, you can seek additional funds through the uninsured motorist provisions of your own policy.

Customer: replied 2 months ago.
A fair settlement would be within the policy limits. We really just want to be able to replace the car without incurring any additional expense on our part like a multi-year car loan and the settlement offered would not be enough for that. Unfortunately no attorney is interested in the case as it is only a property damage case and these aren't worth enough to an attorney to bother with.
Expert:  Legal Expert Justin replied 2 months ago.

Unfortunately, that is often true. Do you have any more questions today?

Customer: replied 2 months ago.
Just one" to verify--the insurance company has no obligation to "vet" or check that what someone who applies for insurance is telling them on the application is true. We believe the person who hit the car lied on the application about having a driver's license as opposed to a learner's permit and if the insurance company had checked this out they would have known this. Frankly if we cannot get another car and we can't on what the insurance company is offering we stand to lose our home and most of what we own.
Expert:  Legal Expert Justin replied 2 months ago.

The only benefit to focusing on the fact that the driver didn't have a license would be to the insurance company. If she is lying and entering into the contract under false pretenses, the the insurance company could potentially escape liability and you would be forced to deal with the driver directly and recover from her. This is almost always much harder. Regardless, the amount of damage to the vehicle would still be the same.

Why are the offering so little? Usually repairs are pretty straightforward. Was there an estimate on the cost? Is the insurance company refusing to pay that amount?

Customer: replied 2 months ago.
The car is considered a total loss. The other driver fell asleep at the wheel of her car and was traveling an estimated 10 miles over the speed limit when she veered onto the wrong side of the road at 5 AM and hit our car which was parked in front of our home, knocking it 90 degrees out into the street and then running up on the sidewalk scraping our neighbor's mailbox and just missing a woman who was jogging by the neighbor's home.The other driver had only a learner's permit and had been cited hours earlier by a sheriff's deputy for driving on a learner's permit without a licensed driver in the car with her. We are not understanding why the insurance company would have insured her in the first place if she did not have have a full license and assume they would have known this had they checked out her application. If they should have vetted her and would not have issued her a policy in the first place if she on[y had a learner's permit we feel they bear some responsibility for her being on the road.
Customer: replied 2 months ago.
Also her's is the only name on the policy so she is not just say on a parent's policy as a permit driver and the parent is the actual policy holder.
Expert:  Legal Expert Justin replied 2 months ago.

The insurance company is saying they bear the responsibility for her being on the road. That is why they are paying the damages. The only issue seems to be the amount of damages incurred. If the car is a loss, they should be using some sort of 3rd party appraiser, such as Kelley Blue Book to determine the value. Are they not willing to pay the price for a replacement vehicle?

Customer: replied 2 months ago.
No we could not replace the car for what they are offering unless the replacement car is a 15 year old junker with 200,000 miles on it or some such
Expert:  Legal Expert Justin replied 2 months ago.

What was your car worth according to Kelley Blue Book? What are they offering?

Customer: replied 2 months ago.
Not sure about Kelley Blue Book. They are offering $3900
Customer: replied 2 months ago.
We have been researching the cost of getting a used car and this would cover a down payment but we would not be eligible for a loan to cover the rest of the cost.
Expert:  Legal Expert Justin replied 2 months ago.

What year, make, and model was your car? How many miles did it have on it? I can look up the estimated value for you.

Customer: replied 2 months ago.
Thank you for you offer but the point is not the estimated value of the car. The insurance company made a decision to insure an individual who did not have a full license, had been cited for a number of moving violations including one for driving on a permit without a licensed driver in the car as well as having a felony record. Either they chose to insure her knowing this or she lied about only having a permit (you cannot tell the difference from just the license number if it's a permit or a full license) and the company failed to check out the information on her application. Either way they made a risky decision by insuring her or they were negligent by not vetting her and they should be held to higher standard when paying out this claim and not just do the least they have to do.
Expert:  Legal Expert Justin replied 2 months ago.

You could potentially seek seek punitive damages for the insurance company's mistake, but that is a longshot. Most jurisdictions only award punitive damages for intentional or extremely reckless acts. Also, there is no way the insurance company will agree to pay any sort of punitive damages in settlement negotiations. That means you would have to file a lawsuit.

In theory, you could bring a claim against the insurance company for negligence and allege that their behavior was so reckless that they should be assessed punitive damages, in addition to paying for the damage to the car. However, it would be easier to sue the girl and allege that she should have to pay punitive damages for driving without a license (in this case the insurance company would still be defending her; rather than defending their own negligence).