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Car Dealership’s Insurance Policy Did Not Provide Coverage to Test-Driving Motorists

Posted in Auto Accidents

In many New Mexico car accident lawsuits, the case is actually defended by the insurance company that provided coverage to the at-fault driver. Indeed, one of the major benefits of obtaining sufficient insurance coverage is that, by virtue of the policy agreement, the company agrees to defend any claims against the insured.When it comes to interpreting their own policies, however, insurance companies have a vested interest. Thus, motorists are routinely frustrated by an insurance company’s denial of their claims. In a recent case, the plaintiffs’ case against an insurance company that provided underinsured/uninsured motorist (UIM) coverage to a car dealership was dismissed after the plaintiffs were rear-ended by another motorist while test-driving a vehicle.

The Facts of the Case

The plaintiffs were on a test-drive when another motorist rear-ended them. The plaintiffs sustained serious injuries as a result of the accident and filed a personal injury lawsuit against the at-fault driver. However, that driver did not have sufficient insurance coverage to fully compensate the plaintiffs for the injuries they sustained.

The plaintiffs then filed a UIM claim with the insurance company that provided coverage for the car dealership that owned the car they were driving when they were hit. However, that insurance company denied coverage, explaining that the dealership opted to obtain UIM coverage only for “directors, officers, partners or owners of the named insured and family members who qualify as an insured.”

The plaintiffs filed a personal injury lawsuit against the insurance company, arguing that the insurance policy violated both state law and public policy by allowing the dealership to pick and choose who was covered under the UIM policy. The plaintiffs argued that, since the policy was invalid, it should be read to provide them with the maximum level of coverage, which was $1,000,000. The law in Georgia, where the case arose, is similar to that in New Mexico in that insurance companies are required to offer UIM coverage, but motorists are free to reject the coverage by signing a waiver.

Here, the court held that the dealership’s waiver of UIM coverage for all people who did not fit within the named group was a valid waiver of coverage, and it held that it was not against public policy for the insurance company to allow the dealership to make this waiver of coverage. Thus, the court rejected the plaintiffs’ claim that they were covered under the dealership’s insurance policy.

Of course, if the plaintiffs were able to establish an independent basis of liability for the dealership, the court’s holding would not prevent them from holding the dealership liable. However, given the facts as described in the appellate opinion, that did not seem to be the case.

Have You Been Injured in a New Mexico Car Accident?

If you or a loved one has recently been injured in a car accident, you may be entitled to monetary compensation. The dedicated Albuqerque car accident lawyers at the Fine Law Firm have extensive experience handling all types of New Mexico car accident cases, and they know what it takes to succeed on their clients’ behalf. To learn more, call 505-889-FINE to schedule your free consultation.

More Blog Posts:

Court Applies Coming and Going Rule in Recent Car Accident Case Seeking to Hold Employer Liable, New Mexico Personal Injury Lawyer Blog, July 18, 2018.

Court Dismisses Plaintiff’s Gas Station Slip-and-Fall Case, New Mexico Personal Injury Lawyer Blog, July 6, 2018.