Legal Question in Insurance Law in New Jersey

Policy Holder Liability for Accident of Other Insured Driver on Policy?

I am an attorney in Washington, DC but practice management-side employment law and I had a family member call me regarding an Insurance Law matter which I do not have much expertise in.

Facts:

Parents (Deleware) gave adult-son (age 19) their car so that he could pursue job in New Jersey. Son is still listed as insured driver on parent's policy.

Son was involved in a serious car crash (80% his fault) where he tumbled into 20 parked cars. Property damage will definitely exceed policy limits and parents called me in a panic when claims adjuster from their insurance company said that anything above policy limits would have to come out of pocket of the policyholder rather than their son (who is an insured driver on the policy).

My first impression was that the insurance adjuster was wrong but wanted a more informed opinion. Since the policy holder did not commit the tort in this case, wouldnt they be off the hook, leaving the insurance companies of the damaged vehicles to seek judgement against the ''judgment proof'' 19 year old??

Any help you could provide would be greatly appreciated.

EJ, Esq.


Asked on 12/21/01, 4:40 pm

1 Answer from Attorneys
Michael Hendrickson Law Office Michael E. Hendrickson

Re: Policy Holder Liability for Accident of Other Insured Driver on Policy?

What does the auto insurance policy itself say

in regard to the parents' liability in this situation? Presumably, the claims adjuster is relying on some provision in the policy which in his modest estimate makes them jointly responsible

with their son for the damage over and above the limits of the policy.

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Answered on 12/23/01, 1:34 pm


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