Bad faith ?

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Bad faith ?

We have full coverage on a financed car and it was stolen from my husband while he was delivering for Dominos. The insurance company says not covered because he was at work. We had no idea it wouldn’t be covered. The employer asked if he had insurance and he told them he did and that was it. No one said he needed extra insurance. We also purchased GAP insurance but im told they only cover what insurance won’t and if insurance doesn’t cover anything GAP won’t either. Do we have any recourse?

Asked on March 13, 2019 under Insurance Law, South Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

You most likely have no recourse. Insurance covers you for the purpose and under the conditions/facts you disclosed when you bought it. Insurers charge more, and are allowed to charge more, when you use a car commercially or for business than when it is personal use only, because with the additional or heavier use that comes from business use, the risks are higher. Therefore, if you only bought insurance for the personal use of your car, you 1) did not disclose business use and 2) did not pay the appropriate amount for business use; that legally lets the insurer disclaim or deny coverage, because you bought the wrong coverage, didn't pay for what you needed, and in essence actually bought insurance under false pretenses. It doesn't matter if you did not know it would not be covered: the insurer simply doesn't have to cover commercial uses of a car if you only have insurance for personal use.


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