Can insurance company deny coverage if at-fault driver had a suspended license?

by Heather

My 18 year old daughter was driving properly when another driver went across the divider line and ran into her vehicle. She had to be extricated from the vehicle and taken to the hospital by ambulance for her injuries. The car was totaled.

Now the other driver's insurance is denying the injury claim because the driver has a suspended license. He was also driving someone else's car at the time of the accident.

We want compensation for her medical bills and the totaled car, not to mention my daughter's pain and suffering for all she went through. What can we do about this? Is it legal for the insurance company to deny coverage for this and just leave us holding the bill? It doesn't seem right.

Visitor Question:
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ANSWER for "Can insurance company deny coverage if at-fault driver had a suspended license?":

Heather (Indiana):

If the at-fault driver had liability insurance at the time of the collision his insurance company must provide coverage. Whether the driver's license was suspended or not should have no bearing on their duty to insure him. As long as his coverage was in effect at the time of the collision there should be no question of the insurance company's duty to cover him for the damages he caused.

Of course, the amount of damages the insurance company would be liable to pay would only be the maximum amount of the driver's liability coverage.

If the driver was uninsured at the time of the collision, your daughter would have to pursue a case against him personally (i.e. against his personal assets). If the driver has no assets she could have a judgement issued against him by the courts.

In addition to pursuing a claim against the driver, your daughter also has a right to pursue a separate claim against the owner of the vehicle. Both claims should be independent of one another.

Be sure to gather as much evidence of the driver's negligence as possible. Police reports, witnesses statement, photographs, and other evidence of the collision will be very important.

If the insurance company continues to refuse to provide coverage, seeking the advice and counsel of an attorney would be your next step.

If the attorney is able to prove the insurance company wrongfully denied the claim, and did so in "bad faith" the amount of damages your daughter would be eligible to receive would be well above the amount of the driver's liability coverage. A successful bad faith insurance lawsuit can result in the insurance company having to many thousands of dollars in damages, especially punitive damages.

The above is general information. Laws change frequently, and across jurisdictions. You should get a personalized case evaluation from an attorney licensed in your state. Find a local attorney to give you a free case review here, or call (888) 647-2490.

Best of luck,

Judge Calisi

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