Third Party Liability Claim is paid

An insured contacted our office regarding a motor vehicle accident involving her live-in son. While the insured was hospitalized, her son took her vehicle without her consent. While operating the vehicle under the influence of alcohol, he struck a telephone pole, causing damage to both the insured’s vehicle and the utility company’s equipment.

The insurer denied coverage for the damage to the insured’s vehicle on the basis that the son was operating the vehicle while impaired. In addition, the insurer incorrectly applied a Section C – Collision exclusion (theft of a vehicle by a person residing in the same household) to deny coverage under Section A – Third Party Liability. As a result, the insurer took the position that the damage to the utility company’s property—estimated at approximately $6,000 to $7,000—was not covered, leaving the insured personally responsible for these costs.

Given that the damage to the utility equipment clearly fell within the scope of third-party liability coverage, we disagreed with the insurer’s position. We advocated on behalf of the insured, and following a further review, the insurer ultimately reversed its position and agreed to cover the third-party damages.