auto insurance

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I took out a loan a year ago so my sister could buy a new car. Initially, I was going to co-sign but my credit union said my credit was excellent they would give loan in my name. We buy the car. My sister buys insurance on the car. The credit union has proof of insurance. My sister gets hit by an uninsured motorist. The car has been in the body shop over a month when the insurance company states that the policy is invalid because I own the car but she has the insurance. She makes the payments on the vehicle. She has one year's worth of checks. She has an insurance policy payed through May. Can the insurance company deny this claim even though there is a policy for this car that is paid and up to date.

 

[I AM ALWAYS LIABLE]

My response:

If the car was in your name; e.g., on the loan papers, car purchase agreement, and on the registration, then it makes no difference whether or not she was the one making the payments. The fact is, the car was "legally" yours, and under the law, and since she was not the legal owner or legal registered owner, she was insuring a vehicle without any legal "insurable interest".

In summary, in order to insure anything, there must be an insurable interest - - like ownership of the thing being insured.

Therefore, the insurance company is correct, and all they are obligated to pay you is a refund of all premiums paid.

I can only surmize that when she purchased the insurance, she told the insurance company that she was the person who owned the vehicle. Obviously, and despite her belief, that was not a legally true statement.

Good luck to both of you.

IAAL

 

[[email protected]]

reply

Thank you for your prompt reply. I forgot to mention that the original bill of sale from the dealer listed both my name and my sisters name on the document. The credit union states that we have a valid policy on this vehicle regardless of who has title. The insurance rep should have been keyed in to what the fact that my name was on the bill of sale. Why didn't he put me on the policy. He has no answer for me and unfortunately, now we have to pursue a lawsuit against the insurance company and the uninsured person who hit her. Thanks .