Three Vehicle Insurance Policy Questions

Steven Cesare, Ph.D.

A landscaper from Georgia called me the other day regarding a vehicle accident involving one of her work crews and another vehicle. The conversation was procedural in nature, straightforward, and bereft of any interesting details. In keeping with my nature, during the conversation, I repeated the same phrase several times: “It depends what is included in your vehicle insurance policy.”

We all know the phrase “the devil is in details” has special meaning and usually surprising financial impact when it comes to insurance policies. With that admonishment in mind, the landscaper obliged my repetitious comment each time by finally pledging to verify her answers to my questions with a follow-up telephone call to her vehicle insurance agent.

Toward the end of the conversation, I directed the landscaper in this way: “As long as you have the insurance agent on the telephone, make sure you ask him/her the three basic vehicle insurance policy questions.”

All together now….”What?”

That was the same question she asked.

Here they are.

If a company employee is driving a company vehicle on personal time (e.g., going to the supermarket, stopping at a bar on the way home from work, or going on a weekend camping trip) and gets into an accident, in which the employee is found to be at fault, who is liable for the damages, the employee’s insurance company or the employer’s insurance policy? This question is predicated on the infamous incident that happened in southern California several years ago in which a Landscape Foreman stopped at a bar after work on a Friday and had several drinks too many. Naturally, the Foreman got into his company vehicle and began to drive home, for a while. Until he ran over a child on a bicycle. And killed him. This stuff happens; that’s why we have vehicle insurance policies; that’s why we have to know the details within the vehicle insurance policy.
If a company employee is driving a company vehicle on personal time with a non-company employee in the vehicle (e.g., friend, spouse, child) as a passenger, and gets into an accident that leaves the passenger paralyzed, maimed, or dead, and the driver is found to be at fault, who is liable for the damages, the employee’s insurance company or the employer’s insurance policy?
If a company employee is driving a company vehicle on personal time, across state lines or international borders (e.g., Canada, Mexico) and gets into an accident, and the driver is found to be at fault, who is liable for the damages, the employee’s insurance company or the employer’s insurance policy?

When it comes to insurance policies, the devil is in the details. Ask the real questions before you sign the policy.

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