Driving under the influence
The insurer asked Rose whether she had taken any medication in the 24 hours prior to her car accident. Rose said she had taken half a sleeping pill at 11pm the night before.
The insurer asked Rose whether she had taken any medication in the 24 hours prior to her car accident. Rose said she had taken half a sleeping pill at 11pm the night before.
Heather* had car insurance and her sister, Rose*, was a named driver on the policy.
One morning, at 10am, Rose had an accident while driving the car – she failed to stop at a red light and crashed into another vehicle. Heather made a claim to the insurer for the damage to her car and the other vehicle. The insurer told Heather that her car was a write-off and to arrange storage with a towing company, at her own cost, while they processed the claim.
The insurer asked Rose whether she had taken any medication in the 24 hours prior to the accident. Rose said she had taken half a sleeping pill at 11pm the night before.
The insurer declined the claim, including the six weeks of accumulated storage fees, because there was a policy exclusion for “any loss, damage or liability … If your vehicle is being used or driven by any person who … is under the influence of any intoxicating substance or drug”.
The insurer also said Heather had failed to take reasonable care of the vehicle and that she had failed to disclose Rose’s sleeping pill prescription when she arranged the policy.
The case manager explained to the insurer that the drug exclusion in the policy did not apply, because there was no evidence that Rose had been under the influence of an intoxicating drug. Rose’s doctor confirmed she should not drive within 8 hours of taking the medication, and the accident occurred 11 hours after taking the medication.
The reasonable care provision also did not apply, because Heather had not been grossly careless, grossly negligent or reckless. Heather had not been required to disclose any medication any driver had been prescribed and, in any event, there was no evidence that Heather was even aware of Rose’s prescription.
The insurer offered to settle the claim by paying the cost of the damaged vehicles, plus the storage fees, plus $1,000 for special inconvenience. Heather accepted the offer.
Complaint settled
Insurers need to make sure they correctly apply policy exclusions when relying on these to decline claims.
* Names have been changed