How is it that someone else carried the insurance on the vehicle you owned? Did the insurance company believe it was owned by the individual who carried the insurance?

When in an accident, the person who is not at fault or slightly at fault will usually seek compensation for damages, injuries or both by stacking the chances.  So here, he or she will probably sue both the owner of the vehicle and the driver and possibly the person who carried the insurance if these are all different people.  Liken it to the following: Person A gets hit by the car owned by Parents B and C, but insurance is with Teen D who's parents own the car, and the driver is Teen E, whom Teen D let drive.