You’ve seen the reptilian-like commercials that say you could save 15% on your car insurance premium. I’ve blogged about it here and here. Let’s hope that’s true because you just might need it if you have a claim with some carriers that advertise that way….

An independent agency’s insured has an auto policy that includes collision coverage. The insured’s daughter resides with her and the daughter owns a car insured with let’s call them Chameleon Insurance Company. The daughter negligently ran into her mother’s car. The mother does not want to file a collision claim with her insurer (whether that’s a good idea or not is a blog topic for another day).

The daughter reports the claim to Chameleon and the adjuster denies it, saying that the policy does not cover damage to another vehicle in their insured’s household. The mother’s agent was not familiar with such an exclusion since it’s not in the mother’s policy nor any other policy the agency sells.

We were able to get a copy of the policy we believe the daughter has and it has a liability exclusion for “damage to your property or your spouse’s property.”

Under Definitions, “your” means “the policyholder named in the Declarations or his or her spouse if a resident of the same household.” Unless the daughter’s policy is issued in the mother’s name, this does not apply.

Another exclusion says there is no liability coverage that applies “to property owned or transported by an insured.”

Under Definitions, “Insured means a person or organization described under PERSONS INSURED.”

Under PERSONS INSURED, the list includes “you and your relatives.”

Under Definitions, “Relative means a person related to you who resides in your household.”

Aside from the issue of whether this is the daughter’s vs. the mother’s household (“your household”), assuming this language simply refers to a resident relative, the mother would be a resident relative and this exclusion WOULD apply.

The Chameleon policy differs from the ISO PAP. The ISO form excludes liability coverage “For ‘property damage‘ to property owned or being transported by that ‘insured’.”  [emphasis added]

Note the difference. The Chameleon policy excludes claims involving damage to property owned by “AN” insured, whereas the ISO policy excludes claims involving damage to property owned only by “THAT” insured. In the case of the Chameleon policy, it excludes damage to ANY property owned by any and all insureds, whereas the ISO policy only excludes PD when an insured damages his or her own property.

Despite what Chameleon might like us to believe about saving money on car insurance, as if the only difference between auto insurance and insurers is price, auto insurance policies and companies are not the same. Auto insurance is NOT a commodity differentiated only by price.

But YOU knew that. It’s time to make sure your customers understand this. Every consumer in America needs to understand this. But the carriers selling on price won’t tell them. You have to do it at the grassroots level. If you need more ammunition, here is a recent blog post where I give lots of examples and it links to a FREE resource from the Independent Insurance Agents & Brokers of America with tons of information you can use to educate consumers. Please do it.

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Bill Wilson

Founder at InsuranceCommentary.com
One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information

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