A San Diego family learnt the hard way why it’s important to know every detail about your car insurance and keep it up to date.
Sergio Preciado was involved in a car accident in July 2022 while exiting Interstate 805. He admits it was his fault and adds that no one was injured in the accident.
Preciado exchanged information with the other driver and reported the accident to his insurance company. An adjuster then called for details of the accident and other information, asking if anyone over the age of 14 lived with him, and he told them that his daughter and son, neither of whom had a driver’s licence at the time, also lived at his home.
His insurance company, National General, later sent him a letter saying that because Preciao had not named his son as an excluded driver, his policy would be cancelled, his claim rejected and his premium refunded. The company did not respond to NBC 7’s calls and emails about the case, citing customer privacy.
As a result, Preciado was on the hook for nearly $5,000 in damages to the other vehicle.
“What does my son have to do with this accident?” Preciado kept asking, also mentioning that “he wasn’t driving, he wasn’t with me at the time of the accident, he doesn’t drive at all because he doesn’t have a licence. So why name him?”
Jazmin Ortega of the California Department of Insurance (CDI) said, “It’s not one of the primary considerations in setting the rate or the premium, it’s a secondary consideration.”
Ortega said some insurance companies, such as National General, want to know who has access to a vehicle at any given time, regardless of whether they’re licensed or have permission to use it.
The California Department of Insurance’s investigation into Preciado’s claim found no wrongdoing by National General, a reminder, Ortega says, that we should all be aware of similar types of provisions in policies. This includes roommates, no matter how close the relationship, people who live with you temporarily while they’re looking for their own place, and students who return home on a regular basis, even if it’s just for holidays.
“So they’re not at home full time, but if they’re licensed and have access to the vehicle when they’re at home, they should be included in the policy,” says Ortega.
At the very least, they should be listed as an excluded driver, says the CDI.
Here’s what insured drivers should do:
- Review the details of your policy, especially if you have someone over the age of 14 living at home.
- Make any necessary updates (and do so regularly in the future)
- If you’re in any doubt, contact your insurance company – it’s better to ask questions before an accident than after.
“There are so many variables in every insurance policy… it’s hard to give a general answer that applies to everyone,” says Ortega.
Preciado admits to rushing through the forms when he applied for car insurance. But now he’s scrambling to pay for damage he thought was covered by his policy.
