Son borrowed car and had an accident, but insurance delaying payment?

by Mittie
(Montgomery, Alabama)

My grown child had my permission to drive my car. He was involved in an accident which was his fault and now my insurance doesn't want to pay. They say they are investigating before they pay to see if it's my car or his car. The car is registered in my name and the insurance is in my name, but he was driving it.

He has his own car but borrowed my car that day due to car trouble. It has been over five weeks and they haven't fixed my car or given me a rental car. How long am I supposed to wait for them to fix my car or reimburse me? Isn't there a time limit? Also, does his insurance have any involvement? Thank you.

Visitor Question:
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ANSWER for "Son borrowed car and had an accident, but insurance delaying payment?":

Mittie (Montgomery, Alabama):

Your son should have immediately reported the accident to his own insurance company. Doing so is a requirement of his insurance policy. Once reported, his insurance company would have promptly initiated an investigation into the accident.

Presuming your son’s insurance was in force at the time of the accident, his insurance company would have stepped in to defend him, including offering him an attorney to represent him in case he was sued over the accident. His insurance company is obligated to defend him up to the limits of his policy.

Your insurance company may have some basis to believe your son was actually driving his car at the time of accident and not yours. They may have a witness, including the other driver, who stated the car was not the car you contend your son was driving, but in fact, a different car, possibly the one belonging to your son.

If that’s the case, the insurance company has a right to delay paying out on the claim until such time as their investigation is complete. This would be especially true if your son’s car was not insured, or his limits were not high enough to cover the property damage and/or injuries sustained by the other driver or the driver’s passengers.

However, if the insurance company is not acting in good faith, and has no credible basis to believe the car your son was driving was not your car, incessantly delaying its investigation and payment of the claim, then the insurance company is exposing itself to a claim by you for bad faith dealing with an insured.

Learn more about how to identify and defend against bad faith tactics here.

Bad faith lawsuits subject insurance companies to substantial penalties, including punitive damages in the thousands of dollars. If you continue to have a reasonable belief the insurance company is acting in bad faith, seek out several personal injury attorneys in your area. Most will not charge for an initial office consultation.

If you find an attorney to accept your case, you will likely not have to pay the attorney until, and unless the attorney succeeds in settling your bad faith claim, or wins it in court.

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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