Legal Question in Insurance Law in California

Didnt have full coverage at time of total loss...what do I do now?

I was recently in a car accident where I rear-ended the vehicle in front of me and that vehicle had hit the car in front of them, but the front vehicle that caused the chain reaction accident by stopping in the middle of the road fled the scene. My insurance company is now telling me that I did not have full coverage at the time of the accident even though the vehicle was under a lienholder and that I am the one that is at fault even though I was driving at a safe distance and a safe speed away from the vehicle and there was nothing I could do to avoid the accident. My question is can I go after my insurance company for the remaining balance of the loan on the vehicle because it was under a lienholder that required full coverage and the insurance company was fully aware of that? If not, can I sue my lienholder for not protecting their own interest because they were notified on multiple occasions that I did not have full coverage on the vehicle, but they never sent me anything saying I needed to add more insurance to protect the remaining balance of the loan? It just does not seem right that neither the insurance company nor the lienholder should have to take blame for this when they both knew they were doing something wrong?


Asked on 4/01/08, 12:08 pm

1 Answer from Attorneys
Edward Hoffman Law Offices of Edward A. Hoffman

Re: Didnt have full coverage at time of total loss...what do I do now?

What, exactly, do you think the insurer or the lienholder did wrong? You were the one who was required by contract to have more insurance, and you didn't do it. The lender is not required to remind you what its contract says; the reason the contract was written down in the first place was to ensure that each of you would know what was required of you. You can't hold it responsible for your breach of the contract.

Your insurer -- which is not a party to this contract -- likewise has no obligation to tell you you had breached the loan agreement even if it knew of the breach. Knowing what you agreed to was your responsibility, not your insurer's. The company has to give you the coverage you paid for, but it doesn't have to give you what you didn't pay for despite the terms of your loan.

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Answered on 4/03/08, 6:43 pm


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