Bad faith ?

UPDATED: Oct 1, 2022

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Bad faith ?

We have full coverage on a financed car and it was stolen from my husband while he was delivering for Dominos. The insurance company says not covered because he was at work. We had no idea it wouldn’t be covered. The employer asked if he had insurance and he told them he did and that was it. No one said he needed extra insurance. We also purchased GAP insurance but im told they only cover what insurance won’t and if insurance doesn’t cover anything GAP won’t either. Do we have any recourse?

Asked on March 13, 2019 under Insurance Law, South Carolina


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

You most likely have no recourse. Insurance covers you for the purpose and under the conditions/facts you disclosed when you bought it. Insurers charge more, and are allowed to charge more, when you use a car commercially or for business than when it is personal use only, because with the additional or heavier use that comes from business use, the risks are higher. Therefore, if you only bought insurance for the personal use of your car, you 1) did not disclose business use and 2) did not pay the appropriate amount for business use; that legally lets the insurer disclaim or deny coverage, because you bought the wrong coverage, didn't pay for what you needed, and in essence actually bought insurance under false pretenses. It doesn't matter if you did not know it would not be covered: the insurer simply doesn't have to cover commercial uses of a car if you only have insurance for personal use.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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