The Art of Adjusting® Podcast

Episode #59: Who’s Liable When Your Car is Stolen?

• Season 3 • Episode 59

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In this episode of The Art of Adjusting®, William and Chantal dive into a listener's question about liability coverage for stolen vehicles and expand the discussion by exploring related topics from various Reddit subreddits focused on the insurance claims industry. They break down the key question of whether a vehicle owner is liable for bodily injury or property damage caused by a thief, explaining that liability typically doesn’t apply since theft is an illegal act. However, they also clarify how comprehensive or collision coverage might come into play for damage to the stolen vehicle.

Drawing on insights from Reddit, they tackle questions about the claims process, subrogation, and the pursuit of restitution from at-fault parties. They also explore the concept of negligent entrustment, emphasizing the importance of listing regular users on an insurance policy to avoid disputes.

With its blend of expert analysis and real-world scenarios, this episode offers practical advice for adjusters, policyholders, and anyone navigating the complexities of stolen vehicle claims. Tune in to hear how industry professionals approach these challenges and to gain a better understanding of coverage and liability in these situations.

This audio has been edited and engineered by Nicholas Kearns, 585-545-9976, cococola576@gmail.com, NJKearns@alumni.fullsail.edu

For more insights, you might consider a career in liability adjusting or if you're searching for reliable adjusting services, visit Auten Claims Management.

To explore more about Chantal Roberts and her contributions to the industry, visit CMR Consulting.

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William Auten:

Hello, I'm Bill Auten of Auten Claims Management.

Chantal Roberts:

I'm Chantel Roberts of CMR Consulting and welcome to the Art of Adjusting podcast.

William Auten:

Today we're going to talk about life as an insurance adjuster from the perspective of property, auto liability or workers' compensation adjusters. Our goal is to bring interesting topics in the world of claims adjusting to people who are working as an adjuster now and to people who are considering a career as a claims adjuster. Hey Chantel, how are you?

Chantal Roberts:

I'm doing well, thank you. How are you doing?

William Auten:

Pretty good. Today we're going to talk about listener questions. Yes and Happy.

Chantal Roberts:

New.

William Auten:

Year, oh, and Happy New Year. Yes, yay, it is 2025. I, the year, just snuck up on me so fast. I can't believe how fast time goes as you get older and things just happen. And now it's crisp, you know, christmas hit and then the next thing you know it's going to be June again, right?

Chantal Roberts:

So for yourself, about getting older, I mean, look at, look at me well I know you're not aging, but some of us do.

William Auten:

Some of us, mere mortals, still age that's true.

Chantal Roberts:

That is true. Yes, we do have listener questions and I'm super excited about this. This is one of our uh five listeners and I'm super excited because we don't really have a lot of interaction with our listeners. I am excited. Please feel free to send us in questions.

William Auten:

I love that. Yeah, you can reach us on many different channels. I think there's a messaging thing on Spotify through the podcast, but I'm not positive about that. I know you can make a comment on the YouTube videos you can, and if you don't like to do either of those things, we're on LinkedIn. You can find us. So it's William Auten, chantel Roberts, I think. There's even links in the show notes.

Chantal Roberts:

Yeah, we're so easy to find us. Yes, absolutely.

William Auten:

So this question came from somebody I've known for many years. It's my friend, dave Iadanza, and he is an insurance professional who's been in the business for a very long time and he knows a lot of people and he's very smart about things. But he has a question about auto liability. Why don't you pitch the question for us?

Chantal Roberts:

Okay. So Dave's question is actually really really good and I have worked these kind of claims before. So Dave has asked about liability coverage when the vehicle is stolen and thieves cause bodily injury while maybe they're driving the car and or property damage to the car while it's been stolen. And he also asked a follow-up question if there is or are responsibilities from you as the owner for this car being stolen. If the car was stolen without keys and I am assuming he's talking a lot about you know those oh, it was a Kia's or Hyundai's or whatever, where everybody was on TikTok.

Chantal Roberts:

I think both of those you know talking about like hey, break into this car.

William Auten:

Yeah.

Chantal Roberts:

And I've actually worked a lot of these kinds of claims and we can also talk about. This is a great question, because we not only talk about liability of it, but the property damage of it, which coverages are going to be hitting. We can also talk about subrogation. So it's going to be an info packed podcast, like always, so yay us great.

William Auten:

My knowledge of the personal auto policy is pretty basic.

William Auten:

I mean, I could handle a claim if it came across my desk, but on a nuanced question like this one, I'd probably have to reach out for some help. So that's why I'm asking you some of these questions today. I'm going to review what he says here and tell you what initially comes to my mind. And you know me, I'm a general liability guy, so I'm always thinking about whose fault it is and my initial thing is that if the car was broken into and the ignition system was somehow hacked by this person and to no knowledge of the owner, it'd be very difficult in my mind to assign any liability to the person who owns the car. That'd be different if they left the keys out. That might change liability a little bit, but I still think that if your biggest fault is leaving the keys in your driveway one day, that doesn't necessarily make you liable for an auto accident that happens 10 miles away after somebody steals it. So this is my train of thought and I'll let you respond to that.

Chantal Roberts:

I would agree. I agree, even if we accidentally left the keys in the car or we didn't lock the door. I know when I was living in Arkansas one time my husband had a note on his windshield one morning from the Little Rock police. And what the police were doing is driving up and down our streets, popping doors open and seeing if anybody had left the doors unlocked. And if they did, they very kindly locked the doors, shut them again and then put a little note saying hey, you forgot to lock your doors, please be sure to lock your doors. Prevent crime, these sorts of things. And I thought this is a great idea.

William Auten:

It's interesting.

Chantal Roberts:

Good publicity, you know. Anyway, but even if we accidentally left our doors unlocked or something to that effect, maybe even left our car and the keys in the car, I would agree You've got to look for liability. To begin with, with that ABCD rule that I always talk about, is there a duty? Did that duty get breached? Was that breach of that duty the proximate cause? I don't necessarily know if there's a duty to keep the keys on you at all times, it's just smart to do it. But I don't think that you've breached any kind of liability. So in that aspect I would agree.

Chantal Roberts:

When we're talking about some thieves taking your car and do enjoy rides and maybe they hit someone and they cause bodily injury, I do not think that you would be responsible. Now, can you have a claim put on your policy? Sure, can you be sued? Yeah, probably, you know. I mean, everybody can be sued for everything, I think. I think the and I kid you not I have seen these claims where the joyrider has hit something and they've gotten bodily injury and they try to put in a PIP claim, a personal injury protection or med pay claim on your policy because they were in your car that they have stolen and you're like dude.

William Auten:

It reminds me of the story about the thief who falls through the skylight into the kitchen and lands on the knife and gets cut by the knife and sues the homeowner.

Chantal Roberts:

Yeah, I mean, you know sometimes nobody said thieves or robbers were very bright, and so there you go. Could they do this? Yes, would there be coverage? I don't know. I think I would have to look at the policy on that one.

William Auten:

I would think that the policy language is going to be important in all these, and not being able to just draw it out in my memory is going to be the the kind of the problem that I have today well, I can pull up the policy, but I don't want to.

Chantal Roberts:

I'm just going to speak off the cuff and just act like I know what I'm doing, like I normally do. I mean, sure, um?

William Auten:

well in this, in this conversation, the phrase that comes to mind is permissive use and well yes, I also want to say illegal acts.

Chantal Roberts:

Yeah, because that's an exclusion. Yeah, it's an exclusion. So if this driver stole your car which I mean that's an illegal act I don't think there's going to be coverage period for that driver. Now here's the deal there would be property damage coverage for your car, even though got stolen.

William Auten:

Yes, like, like that driver that's under um hit a person, it's under collision or comprehensive, whichever one they hit that's interesting because, um, if you had comprehensive and collision, the collision would cover when it collides with something and causes damage, and I don't know that it is dependent on whether or not it's someone authorized to drive the vehicle. But theft is part of the comprehensive coverage, right? So I wonder if you'd have a like if you? I've seen some policies will have a separate deductible for both coverages, so the carrier has to decide whether this damage is from theft or collision.

Chantal Roberts:

I think they're going to go ahead and choose the collision, because theft would be like the complete disappearance Right and or the complete destruction of. Right Like let's say it burns and it ends up in the tow yard, and that's how the police find it.

William Auten:

Well, vandalism falls under that coverage as well, doesn't it?

Chantal Roberts:

Yeah, yeah, but I don't know. Again, you're right, it would go off of what the carrier rules would be and then, of course, what your policy says.

William Auten:

I think that it's fact dependent. Of course, every planet If this thief was a very safe driver, okay, and Of course every planet If this thief was a very safe driver, okay, and simply ran a red light and T-boned somebody. That's definitely a collision, absolutely. But if this was a joyride through a parking lot where they were sideswiping every parked car there for fun, that sounds a little more like vandalism to me than collision.

Chantal Roberts:

Yes, if this is like Mayhem doing the parking lot run as he was late because he was the mascot and he was running right, that one, yeah, that one would be vandalism, you know, joyriding kind of deal. And yeah, if mayhem took your car, then then yes, so regardless, your insurance would pay for that car. Now, now, what? What may happen and again I have heard of insurance companies doing this is, let's say, that the thieves are caught and your car is returned to you by the police, even if it's banged up.

Chantal Roberts:

What I have heard your, what I have heard your or I have heard from insureds to saying that they have been told by their adjusters that their policy will not cover this, that they've got to file this through the thieves or the joyriders or whatever kind of policy they may have, or just have them pay out of pocket. This would be incorrect, because here's the deal you could get your car repaired. You will have to pay the deductible, but then there would be subrogation. Sure, your insurance company, the whole purpose of your insurance company, is to help you out of a buying.

William Auten:

Yeah, well, that's you know those. The collision and comprehensive are the first party components of the coverage and it's the it's the part that you pay for as a policy holder for the benefit of getting your stuff put back to the way it was prior to the incident. Absolutely Same with a. So I'm not going to say regardless of the cause, you'll have coverage. That's not really what I'm saying, but in a sense, if there's a collision loss and it meets the definition of a collision, it doesn't matter if it's somebody else's fault. If you've got the first party coverage, it's available to you, unless you're deductible. Yes, and yes, they have subrogation then as well.

William Auten:

I mean, I get a lot of questions from people that ask about you know, I got in a car with an accident with another vehicle. It was their fault. Do I go through my own insurance company or through theirs? Right, and that's a choice people have to make. It happens with homeowner's claims too, believe it or not, but in auto it's the best demonstration of it, because you've got this coverage available to you that you can take advantage of.

William Auten:

The only thing it's going to cost you is your deductible, which is a drag, right? If you've got a $1,000 deductible. You've got to pay that out of pocket and then hope that the subrogation works out. So that's one avenue. The other avenue is that, well, and you may also have rental car coverage, that will kick in. That will pay you. Now, if you go after the other insurance company, if you make a claim against the other car's liability coverage, they owe you rental car coverage too, because if your car's in the shop, they got to put you back in the place you were. So, technically, if you drive a great big suv, they've got to give you a great big suv, not a little. Yes, you know matchbox car which you may have to take if you bought the rental car coverage under your own policy right, because there are some limitations when you have rental on your own policy, such as $25 a day or the daily limit or something like that.

Chantal Roberts:

Exactly, yeah, and I think that this is a very good point to make. That many adjusters don't understand and many adjusters don't get is that, yes, you absolutely can file, or the insured can file on their own policy when there is a covered cause of loss, and then you, as the adjuster, turn around and subrogate.

William Auten:

As the adjuster.

Chantal Roberts:

yes, as the insurance company and you would. By the way, guys, you would pursue the insurance deductible and I usually, as the adjuster, pursue any non-covered items. For example, oh, I don't know, let's say they didn't have rental coverage on my policy and the insured paid for rental coverage out of their own pocket. I would say, okay, insured had a $500 deductible. They also paid $52 a day for three weeks to get the car repaired for rental. You would pay that amount to Mr and Mrs Insured. You pay me X amount for the repairs of the vehicle and I got to tell you I have also, again as an insured, gone through my own insurance company because I just don't want to mess around with the liability adjuster.

William Auten:

Well, that's. The other big drawback is you got to get into an argument about whose fault it was and you may think it's the other 100%, the other driver's fault, and the other driver at the scene may have said something along the lines of I'm so sorry, this was. I made a mistake, this is my fault, I have insurance coverage. No problem gets to the adjusters desk and they review the police report and they look at the diagram of the scene and they think well, you know, I think this was more like 50-50. That's when you lose your mind, right, and then you are now in a position to be fighting with this adjuster over what you think happened versus what they think happened, and you've got to make the case for it.

Chantal Roberts:

Yes.

William Auten:

And that's a difficult position to be in. And if you've got the coverage, that's a better time to use it, because then you can let them fight over the liability issues in the subrogation process.

Chantal Roberts:

Now the next question you are going to get as an adjuster from the policyholder is will my rates go up? And the answer to that is I don't know. I don't deal with rates. I recommend that you speak with your agent.

Chantal Roberts:

What I also recommend to you as an adjuster is when you are sending out that subrogation letter to the at fault party, if you know their insurance people, you know you're sending it to that at fault adjuster.

Chantal Roberts:

I would send it to that at fault party and I do a maybe a BCC, a blind carbon copy, to my insured, so that my insured knows that I'm asking for these things for them. So that keeps everybody on the same page, got it? I also, like I do like to copy the at fault party along with their insurance company if I know who they are, because sometimes the insurance company doesn't want to do things. Or sometimes if I'm just sending it to the at-fault party and not their insurance company, like, let's say, I don't know who the insurance company is, that at-fault party won't send it to their insurance company. So I do like to keep everybody on the same page when I'm doing subrogation. And, by the way, if you don't know, I tell my students this. Subrogation is that fancy insurance word for reimbursement, and that is what subrogation is. I know a lot of companies go through, like Cozen and O'Connor now, or they have subrogation units. Get your subrogation department involved early if you're not pursuing it yourself.

William Auten:

Back to the thieves. Here. We'll call them the bad guys. When the bad guys steal your car, they don't really have the benefit of liability coverage to protect them, do they Under your policy?

Chantal Roberts:

No, no, not under your policy.

William Auten:

You will likely have coverage under the first party benefits for damage that they might do to your car, correct?

Chantal Roberts:

Yes, oh, you know what. I also thought of another thing that we have done for people who have done criminal acts, and this is something that we have done for people who have done criminal acts like stealing a car. It's usually involving theft of copper pipes or something to that effect and those people may not have insurance for us to subrogate against, and they may not be the people who would have any kind of assets for us to put a lien against. Maybe they're renting, you know, or something to that effect. It's not like we can garnish wages or something where we think we could get money back from. However, we know that they're going to go to trial because they've done something illegal and you can send a letter to perhaps the police department asking that your amount that you have paid be put in to the sentencing, or maybe the district attorney. If it's gone that far, I have no idea I I usually send it to the police department. So we.

William Auten:

We typically refer to that as a restitution request and we send that to the district attorney's office and they'll usually respond depending on the case and and throughout my career we've done that arson cases, you know. We'll get restitution orders for that. Where someone's definitely at you know, purposefully burned a building down, yes, and if they don't have any assets, it's difficult to collect sometimes.

Chantal Roberts:

Have you ever gotten money back?

William Auten:

Yeah, I have too. Yeah, sometimes it's been, you know, $82.52 a month for 30 years.

Chantal Roberts:

You know yes yes, and it really kind of sucks because you have to keep your file open.

William Auten:

Mm-hmm. And probably by the fifth or sixth month they quit paying, and you know that it's just I know that the previous carrier I was with probably still has open files that they're collecting restitution orders from. And it's funny because some of the cases involve people that really did feel remorseful about what they did, and there would be times where we'd get a call saying look, I'm in a bind this month. I'm going to be late with this payment. I just want to let you know. It's like man, don't you just feel?

Chantal Roberts:

You do you feel bad for them. They made a bad decision, but.

William Auten:

It's a court order, you can't really I mean it wouldn't even be within our power to forgive it. I don't think without a, without some sort of um say by a judge. But anyway, that's what would happen in in a case where your car gets stolen and it causes damage to somebody else, um, that person who has damage or injury could make a restitution order against the person who caused the damage. Collecting it is an entirely different animal, but there are ways to do it.

Chantal Roberts:

Absolutely, Absolutely so yeah.

William Auten:

So if I were injured by someone who stole a vehicle and maybe that's the root of Dave's question here I mean he really asks if the owner is responsible if the car was stolen.

William Auten:

So that's probably the crux of his question. But what comes to mind for me right now is if I was injured, what do I do so I can find out who the car owner is and try and make a claim there? We've already determined that their insurance company probably isn't going to contribute to any bodily injury claims for for that incident. The next step would be to find out who was driving and then find out if they were arrested and then find out who the district attorney is and let them know what happened and your plight and what your claim might be. Um might be worth getting an attorney to help you with that right, but that's that's kind of the boat you're in. If you're injured in a situation like that is that you're going to have to chase down the at-fault party and hopefully extract some money from them for your damages sometime so I did go ahead and I caved and I pulled up our standardized personal auto policy.

Chantal Roberts:

It is the PP00010918. So this is our standardized policy. Of course, every policy is going to be different, and I'm looking at Part A liability coverage. So if our joyriders, our bad guys, injure a person in the theft of your automobile, the insuring agreement for this Part A liability coverage says we're going to pay damages for bodily injury or property damage for which any insured which would be you as the owner of the vehicle becomes legally responsible because of an auto accident. And I think the words that we need to pay attention to are legally responsible. And that's where, again, we're going to be talking about our liability aspects, and you are our liability expert, bill.

William Auten:

Sure. So you know we deal with negligence and liability claims all the time and, yeah, the policy holder, the insured person, has to have been negligent and if they somehow contributed to, maybe, the acts you know. All right, let's let's talk about the bad guy. Let's say the bad guy is a neighbor and the bad guy has a history of stealing things lawnmowers, mini bikes, cars and you know this. And you leave your car in the driveway or run in one evening and you forget about it because you're watching the news or whatever. And you go out to check on it and the car's gone and that guy of course he stole the car because that's what he does and you knew that and you left the keys in there some liability could attach to you.

William Auten:

There's a doctrine called negligent entrustment, yes, and if you actually let the person take the car and they got into a wreck, well that'd be a situation where you should have known better. We get cases like that a lot involving ATVs, minibikes, recreational type vehicles, because people will let their kid operate the thing, knowing that the kid really isn't responsible enough because they're only nine years old or whatever to be operating the thing, and they go injure somebody with that. Well then, that's a. That's's a. Is it responded superior? But it's definitely negligent entrustment, meaning that you should have known better before giving the keys to somebody who was not responsible enough to handle the thing.

Chantal Roberts:

It's interesting that you say that because I'm I'm going through here real quick and I and it was something that I wanted to bring up, which is this idea as well, and we're going to slightly go, I guess, left of center real quick, off of the topic, but it is somewhat tangential Is those are the people who have regular access to your car, because I am a member of the Big. I Ask an Expert and we just received a question about the stepmom who has a stepdaughter come and stay, like during the summer or during Christmas break or whatever, and how should the stepmom put this stepdaughter onto her policy, to her policy? And I had said well, you need to know that if the daughter has access to your keys, she's going to be an insured, whether she lives there like full time or not kind of deal, because she has access to those keys. And I'm looking right here under Part B, medical payment coverage. So that's the MedPay, the PIP, the warm and fuzzy aspect.

Chantal Roberts:

Going back to our joyriders, slash neighbor or whatever. Of course, it says we're going to pay reasonable expenses for bodily injury caused by an accident sustained by an insured, and it also says exclusions sustained while occupying without a reasonable belief that the insured is entitled to do so, like the insured. Of course, we're still talking insured, which would be you, not the joyrider, but if the insured gives access to that vehicle, that person could be considered to be an insured. Yes, I mean I'm going to look up the definition of an insured real quick, so you go ahead and finish talking, but this is something that we really have to talk about.

William Auten:

So I'll give you my cursory understanding, my foggy understanding of it and you've got the policy. You can tell me if I'm right or wrong. My guess is that you are allowed to let somebody borrow the vehicle, and if you do they're covered. But if you got like a teenager living at home and he's going to drive your car on a fairly regular basis, you better have that person on the policy, because if they live there and they're using the vehicle regularly, I don't think they're going to be considered an insured and I don't know where the line is. So that's you know some of my weaknesses on the auto side you know, and I and I'm like that too.

Chantal Roberts:

Okay, so family member is defined. Family member means a person related to you by blood, marriage or adoption who is a resident of your household. This includes a ward or foster child. Now, again, I'm thinking resident of your household. The neighbor wouldn't count, but this stepdaughter who comes and lives with you for two or three weeks out of a year may be considered to be a resident of the household.

Chantal Roberts:

Now, insured for our liability is you or any quote family member for the ownership, maintenance or use of any auto. So that's again where we're getting into this ability to grab a key, and I know a lot of people don't want their teenagers put on the policy because their policies are going to go through this roof. It probably would be covered, but the problem is going to be you may be dropped because you didn't bother telling the insurance company, or it's going to go through the roof anyway. I mean, your policy premiums are going to go through the roof because not only have you not told the insurance company, but they've had an accident and now the insurance company knows that there is a teenager driver. Any person using your covered auto is seen as an insured. So that's going to be like the permissive use Right. So yeah, so that's where we get on that definition. So insured in the auto policy is pretty broad.

William Auten:

It can be. Yeah, it sounds like Pretty broad. It can be. Yeah, it sounds like. So I had talked about with you offline about Reddit and a lot of the questions that get raised on Reddit, and there are a lot of auto related questions in terms of liability and even first party, and one that comes to mind is an entry by and I believe this was Reddit. Comes to mind is an entry by, and I believe this was reddit. If not, it was one of the forums on facebook, but I'm pretty sure it was reddit because I think it was an anonymous post and they um, they were a new uh, new broker or agent and a policyholder asked them about their teenage son and whether or not they had to add him. And this, this person told them no, he's fine.

Chantal Roberts:

Oh, no, no, no.

William Auten:

And then the next day, no, no, no, no, you got to add him. The next day he went out and wrecked the car and, you know, hurt six people or something some crazy story something along those lines. So Reddit is a font of stories like that that make you cringe, and the responses can be be range from scary to hilarious and somewhere in between.

Chantal Roberts:

So yeah, yeah, I would say okay. So, first of all, if we have any agents listening and I do mean agents, not brokers agents are the representatives of the carrier. Agents are the representatives of the carrier. Brokers are the representatives of our policy holders. I would also say our claims adjusters, staff adjusters, are our agents of the carriers. If you find out that Junior is driving a car, you have a duty to tell the carrier, because notice to you as the agent or the insurance adjuster is notice to the carrier and so failure to do that is how we get into that whole trouble with we had knowledge and we didn't do it. And have we waived any of our defenses? And I know New York is weird, because you and I just attended a great webinar about not a reservation of rights letter in New York, although I always want to call it a reservation of rights but waivers of coverage and what did they call them? Declination letters or something to that effect.

William Auten:

Denial or declination letters or something to that effect. Denial or declination or, uh, coverage disclaimer yeah, so, um, one thing to remember about new york is that in this scenario where bad guy takes the vehicle, is that, um, that, that rule about issuing a denial letter promptly, like two weeks, 30 days, with definitely within 30 days? If you fail to do that, you could be barred from utilizing an exclusion. That would apply Now, in this case, if there was illegal activities, that's an exclusion. If you're going to rely on that exclusion to disclaim coverage for this event and you don't do it within 30 days, you might be barred from using that exclusion, meaning that you've got to pick up coverage. But that rule does not apply when you've got a situation where coverage never existed in the first place, and I think that's what we would have here with the bad guy is, coverage would never apply to him in the first instance because he's never been an insured. He could not qualify as an insured unless the policyholder let them operate the vehicle.

Chantal Roberts:

Okay, so I would disagree with you.

William Auten:

Okay.

Chantal Roberts:

And I just want to hold that thought, put a pin in it real quick, because we also have Part C uninsured motorist and we have been talking about collision and comprehensive. But if our bad guys take a joyride, we could, if the insured has uninsured or underinsured motorist uninsured in this particular instance, where our bad guys don't have any insurance we could possibly file a claim under our uninsured motorist coverage because that says we will pay compensatory damages for which an insured is legally entitled to recover from the bad guys. I'm paraphrasing ISO. However, here's the deal. Okay, so we're going back to the disclaiming of coverage for the bad guys. I think we can't disclaim coverage to our insured because of the bad guys. I think the bad guys insurance company would disclaim coverage to our insured because of the bad guys. I think the bad guys insurance company would disclaim coverage if there is.

William Auten:

Yeah, so what that rule applies to is just liability and bodily injuries associated with liability. So it wouldn't apply to any of the first party coverages available to the insured, like the collision or the comprehensive or anything like that. And this is a bad example because I don't think that I I don't think there's coverage available to begin with here, so I don't think you could. Uh, I don't think you'd be barred from uh if you were late on a disclaimer and your disclaimer said this person bad mr, bad guy does not qualify as an insured, because here's the definition of an insured. I don't think you'd be barred from that disclaimer if you were late. However, if you were issuing that disclaimer solely on exclusions in the policy written exclusions like the illegal acts or something along those lines, and that's late, that's where you get into trouble. So you have to remember when there's an exclusion, those are the things that get barred.

Chantal Roberts:

If there's no coverage to begin with at the outset, that's not really um applicable to that 30-day rule, yeah, but I'm saying that there could be coverage because we have comprehensive, we have collision and we have uninsured motorists all All right.

William Auten:

So the comprehensive For our policyholder. Like I already said, you will have coverage for the comprehensive and collision.

Chantal Roberts:

Yes.

William Auten:

Any disclaimer you issue would be only relating to the liability that caused damage to somebody else, injury or damage to somebody else. So that's where the disclaimer would be to somebody else. So that's where the disclaimer would be. As far as the uninsured motorist coverage goes, yeah, that only applies if the insured person has damages that the other party won't cover. So I don't see that even happening in this scenario.

Chantal Roberts:

Okay, so I'm looking. Why can't I find like a legal ax in the auto policy?

William Auten:

Yeah, I'm just pulling it off of my feeble memory.

Chantal Roberts:

So uh, no, no, like I'm doing a word search, uh like, legal doesn't, doesn't come up. What else would it be called Stolen? Oh, fun, fun with fun with that.

William Auten:

We might be mixing policy forms here. What a personal auto policy generally does not cover damages or injuries resulting from illegal acts. Meaning if you are involved in a car accident while committing a crime, your insurance company is likely to deny coverage.

Chantal Roberts:

Intentional acts oh, it's in it's under the intentional acts section intentional okay, exclusions, we do not provide liability coverage for um, but it says for any insured who intentionally causes bodily injury or property damage. Well, our insured is not intentionally causing bodily injury or property damage, because our insured did not agree to have their car stolen right so I think you're correct in that aspect that there would be absolutely no coverage.

Chantal Roberts:

However, I do feel I do feel I know you were saying that there's not a disclaimer letter I do feel that a disclaimer of liability still would be wise to any claimant who is alleging bodily injury and filing on the policy, because it kind of ties everything up in a nice little bow Sure. I mean you can send a disclaimer of coverage letter saying that there's no coverage. You absolutely should.

William Auten:

Yes.

Chantal Roberts:

And therefore there is no liability. Because remember, and I'm not afraid to admit this, it did take me a minute a couple of years actually to realize that there is a two-step process in liability. You got to go through the coverage aspect and then you get to the liability aspect. Or you can go through the liability and then go see if there's coverage, but you have to have the check mark in both boxes. There has to be both coverage and liability or responsibility for the policy to respond. And no one ever explained that to me, like broke it down to me like that, even though I understood it. It just took me a minute to figure it out that it's two separate events because we entangle them so much.

William Auten:

It does. It does. A lot of people, especially new folks, get wound up in the liability and coverage dilemma and they'll say but it's not their fault, but it doesn't matter whose fault it is, there's no coverage, right? So figure out the coverage first, because if there is coverage, then you can flesh out the liability because you've got to defend it. If there's no coverage, you don't care about liability anymore because you're not even going to defend it anymore. What you're saying is that this event is not covered under the policy, but the insured was at fault. That's not the issue. Even if they were at fault, there's no coverage and they have to handle this on their own Right.

Chantal Roberts:

And that is something, too, it's very hard for claimants to understand. And I know we were talking about Reddit and how there are new adjusters out there on Reddit wanting mentors and everything, and so if you're a mentor, this might be something that you break down to your mentee and that is okay. First, you got to have those two steps. Is there coverage? No, well, you never get to the liability part, but remember, nobody understands insurance, so your claimant is not going to get that. You know, this person hit me. Yeah, absolutely, that person hit you, but they didn't pay their insurance bill, so they don't have coverage, right? So they're going to have to pay for that out of their own pocket or whatever.

William Auten:

The coverage and liability is a two-step process. And then damages is also a two-step process, because you've got the special and the general damages. And when it comes to liability, what I do generally is I figure out damages first and I figure out damages with the hat on that. This is 100 percent liability situation. And then I apply liability later. So if, if I think the case is worth a hundred thousand dollars full value, but I think it's a 50 50 split, then I apply that and then you know, then we say, okay, full value is a hundred thousand, this is a fifty thousand dollar claim when it comes to the liability breakdown.

William Auten:

So yeah, absolutely absolutely well, have we beaten this topic to death yet? I think we have. I kind of think we have. Or, or dave dave, if you're listening. Thanks so much for listening and I miss you. You should stop by for a cup of coffee sometime yeah, dave.

Chantal Roberts:

Yeah, drop us a note. If you actually any other of our three out of four listeners have questions, feel free to drop us a note, ask us questions.

William Auten:

Yeah, ask us questions and if you're too bashful, post it on Reddit.

Chantal Roberts:

We'll find you there and we'll we'll talk about it there, yeah absolutely yeah, maybe we can start answering some of these questions on Reddit.

William Auten:

That's a good idea.

Chantal Roberts:

The subreddit, of course, is adjusters.

William Auten:

There are several, so there's the subreddit is claims adjusters, insurance adjusters, insurance claim. There's a bunch of them. I can't recite them all, but if you type in claims adjusting or insurance claims or anything like that, you'll find a bunch of topics that people are talking about and there's some really interesting questions. There's some interesting takes on the industry. Uh, there are. There's some, actually some very specific information on the inner workings of some carriers. They don't tell you who they are, yes, but they. But you can get some insight as to how these bigger carriers sometimes operate and sometimes it's not good no, no, which is which is regrettable, but it's there.

Chantal Roberts:

There you go, so all right well, I think good.

William Auten:

Good talking to you, chantelle. We'll see you again next time.

Chantal Roberts:

Yes, absolutely in two more weeks yes ma'am, I guess, or something like that. All right, we'll see you then.

William Auten:

All right, take care. Bye-bye.

Chantal Roberts:

Thanks, bye.

William Auten:

Thanks for joining us on the Art of Adjusting podcast, where we talk about life as an insurance adjuster. Hit that subscribe button real quick and tell all of your adjuster friends to check this out as well. For independent adjusting services, go to wwwautinclaims, and for anyone interested in working as an independent liability adjuster, go to the Contact Us tab to join our roster.

Chantal Roberts:

So this wraps up another Art of Adjusting podcast. If you enjoyed this podcast or this episode, please give us five stars and a review. It does help the algorithm pick us up. In the meantime, you can contact me at theartofadjustingcom for consulting and training purposes.

People on this episode

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Chantal Roberts

Co-host
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William Auten

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Nicholas Kearns

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