Can my GAP insurance claim be denied?

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Can my GAP insurance claim be denied?

I was in a car accident months ago in which my car was determined to be a total loss. I hit a deer on the highway and there was no injury to myself. My insurance company has already paid out, but there’s a remainder on my loan of around $4000. I have GAP insurance and went through the whole process of filing that claim. I spoke with them 2 weeks ago, they said my claim was being processed payment would be sent in 15 days. Yesterday, I received a letter from them saying that due to certain

circumstances, theres a possibility they wont pay out. When I bought my car I had a great job, however a little over a year ago I was laid off. To help supplement some income, I did some driving for Uber. They are saying this violates some of my contract with them in that I used my car as a

commercial vehicle. I know this is a big, debated area these days. I have read my contract and their

clause as to a commercial vehicle as well as all state law pertaining to rideshare that says my car

is still considered a personal vehicle. I don’t know what to do.

Asked on November 20, 2017 under Insurance Law, Colorado

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Yes, the claim can be denied if you used your vehicle essentially as a taxi or limo--call it a "rideshare" if you like, but it's not "sharing": it is being paid by strangers to drive them somewhere, and that is what taxis and limos do. It is a commercial or business use. The risk profile, and hence the likelihood of there being an insurance claim, the likelihood that additional persons (i.e. your passengers) might be involved in the accident and injured, etc. is different for a vehicle used for commerical purposes (to make money) instead of only for personal use. You therefore failed to accurately disclose how you used your vehicle and did not pay for the correct insurance (insurance that would reflect that different risk profile). Not having disclosed how you actually use your vehicle, the insurer is entitled to deny the claim, because the coverage you have was only for the use(s) you stated in getting the policy.


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