What is my legal recourse if a dealership failed to properly get my car insured and now a claim as been denied?

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What is my legal recourse if a dealership failed to properly get my car insured and now a claim as been denied?

I bought a car 2 years ago. When I bought it the dealership said they would change over the insurance. I got the tags, taxes and all other requirements from the DMV. My wife was in an accident recently and the car is in bad shape… and not paid for yet. The insurance company says it was never changed over from vehicle I traded in 3 years ago. The claim was denied. So apparently, I have been paying for insurance for those 3 years on a vehicle that I don’t even own anymore and they denied my claim. Can I get the money spent back to help pay for my car that was in the accident? Can the dealership be at fault for the claim denial?

Asked on June 27, 2015 under Insurance Law, South Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

The insurer has done nothing wrong if no one notified them of the change over, so you cannot recover money from them. You may be able to recover compensation from the dealership for having negligently (carelessly) failed to accomplish the change over, but you will run into a significant problem assuming that you received statments, bills, policy renewals--basically anything--from the insurer over the last two years, which items described, named, identified, etc. the car being insured. If you did, the law puts the onus or obligation on you to *read* such documents and see that the wrong car was insured, then take steps to correct that. So if you did receive anything from the insurer, you will most likly only be able to recover (e.g. premiums paid) from the time of the error the time you received the first communication that should have put you on notice.

If you did not receive any communications putting you on notice, you may be able to recover either premiums paid or the cost of the current claim (whichever is greater) from the dealer for their error.


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