Insurance coverage Q&A: Dad backs into daughter's vehicle

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I have a client who backed into their daughter’s car. The daughter lives in the home and has her own insurance. Farmers has declined the coverage to fix the daughter’s car stating she is listed as a covered party, lives in the household and her dad, the client, is on the loan for her vehicle. The daughter is a resident relative and the vehicle is titled to both father and daughter. 

Farmers sent me the exclusion in the policy that states property damage caused by any insured to: “An automobile that is owned by, rented to, operated by or in the care of that insured.”

I have never run into this and think it should be covered. 

Any help, explanation, etc. would be very beneficial for me.

— New York Subscriber

The issue is that you cannot be liable to yourself for any loss. You can be liable to another person, but you cannot be liable for injury to yourself or damage to your own property.

An example may be helpful: If you’re driving down the road and hit another party because you’re eating a burger, you are liable to that other party for injuries and damages to the vehicle. However, if you drive into a tree, coverage does not fall under the liability section of your policy because you cannot be liable to yourself. In these instances, coverage would fall under the physical damage section of the policy.

The standard auto policy states that liability coverage is provided when the insured is legally responsible for injury or property damage. Most auto policies read the same way.

So in your situation, the father backed into a car that he also owns. It’s also in the daughter’s name and insured separately, but he also owns it. Likewise, since the daughter is a resident of the household, she would be included as any insured, so again coverage would be denied.

The daughter needs to file against her own policy for the damages to her vehicle.

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