Two Insurers Deny a Claim on a Borrowed Car

Attorney Answer

The damage to the car is your sister's claim, and the driver who hit you owes for it whether or not he had insurance. Two denial letters do not extinguish that debt. They change who you collect from, and how hard it is.

Start with the driver. Cal. Civ. Code § 1714(a) provides: "Everyone is responsible, not only for the result of his or her willful acts, but also for an injury occasioned to another by his or her want of ordinary care or skill in the management of his or her property or person, except so far as the latter has, willfully or by want of ordinary care, brought the injury upon himself or herself." The measure of what he owes is set by Cal. Civ. Code § 3333: "For the breach of an obligation not arising from contract, the measure of damages, except where otherwise expressly provided by this Code, is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not." If his policy really had been canceled before the crash, his insurer owes nothing under it — but he still owes personally, and whether the cancellation was effective is a question rather than a fact. An insurer generally has to give the notice its policy and the law require before a cancellation takes effect, and a denial letter is not proof that it did. Ask that insurer, in writing, for the cancellation date and a copy of the notice it says it sent.

There is also pressure available through the DMV. Under Cal. Veh. Code § 16070(a), a driver involved in a reportable accident who fails to provide evidence of financial responsibility faces suspension of the driving privilege by the department. California separately requires drivers to report certain accidents to the DMV under Cal. Veh. Code § 16000(a), and the DMV can tell you which form applies. That report is often what moves an uninsured driver to deal with the damage.

Now your sister's own insurer. A statement that a driver is "not under" a policy is a coverage position, and coverage positions get tested. California courts have not treated driver-based exclusions as automatically enforceable. In State Farm Mut. Auto. Ins. Co. v. Haight, 205 Cal. App. 3d 223 (1988), the Court of Appeal held that an insurer could not enforce a named-driver exclusion against a driver hired to drive by a commercial business establishment where the exclusion rested on that driver's personal driving record. Be clear about the limits of that: Haight involved a commercially hired driver and a specific statutory conflict, and it does not hold that every occasional permissive driver is covered. It is a reason to demand the policy language in writing, not a guarantee of coverage. Many personal auto policies do cover a driver using the car with permission, and the answer here may turn on wording nobody has read yet.

What you can do

1. Have your sister request, in writing, a complete copy of her policy, a written denial, and the exact provision her insurer relies on to exclude this loss.

2. Ask the other driver's insurer, in writing, for the cancellation date and a copy of the cancellation notice it sent to its insured.

3. Ask the DMV what accident report is due from you, and file it if one is. Cal. Veh. Code § 16070(a) is the consequence the other driver faces for having no coverage.

4. Check whether you have your own auto policy, or whether anyone in your household does, and ask that carrier in writing whether it covers you while driving a relative's car.

5. Get two written repair estimates, photographs of the damage to the car and the pole, and the report number if officers responded.

6. Take both denial letters and your sister's policy to a local attorney. Which of these routes is worth pursuing depends on documents nobody can judge from a summary.

Most lawyers offer a brief initial call at no cost, and a few minutes on your specific facts is worth more than any general guidance, including this page.

⏱ Time limits apply. A claim for damage to a vehicle in California runs under Cal. Code Civ. Proc. § 338(c)(1), and if you were hurt when you were pushed into the pole, that claim runs under the shorter period in Cal. Code Civ. Proc. § 335.1. This accident was not recent, so the deadline is the first thing to establish. Have a California attorney check it against your facts rather than relying on any general rule.