Insurance liability question

[threecrazykids]

I am wondering if anyone has knowledge about who pays for what in this scenario.

I have an aquaintance who has some rental properties. He is a cheap *** and doesn't carry any insurance on the properties (they are paid off). Smart "investor" clue #1, right?

Last night a 60+ year old man had a heart attack and drive his brand new truck (literally from the purchase lot home) right through the front wall of one of the houses. My first concern of course was whether or not the poor man was ok, but that isn't the #1 concern of this guy. He's worried only about the damage and how fast it's going to be fixed.

He was afraid at first that the owner wouldn't have insurance, but come to find out he does. He was so excited that the wife of the man had contacted their insurance and opened a claim. He thought all was good and well until he actually spoke with someone from the insurance company. Well, it sounds like the tune has changed.

He is telling me she apparently said that there is a good chance that the insurance company won't be obligated to pay as "sudden illness" is considered an act of God.

He of course is FREAKING OUT because not only do they have a renter who is now living in a hotel (they told her to keep her Feb rent money and get a hotel for now) but he doesn't have that much cash to pay for the property to be fixed.

On one hand, I do kind of agree with him that no matter what he shouldn't be responsible for paying for any of the repairs since they didn't cause it. He said "even if we HAD insurance I shouldn't even have to pay a deductible or anything -his insurance should pay 100% for this"...to which I do agree.

But knowing him, I can't help but feel that karma may just be knocking on his door because he's cheap and wasn't smart enough to carry insurance on these properties to protect HIS investment.

Do any of you know how that would work? Would it be a situation where he'd have to sue this poor old man to have the repairs fixed?

 

[Darcy03231]

I'm not a lawyer, but even if it were covered under an "Act of God" clause, the driver's insurance will most likely pay.

I had something covered under an "Act of God" clause and all that does is make it so the driver isn't responsible under the collision portion of their insurance. It's covered under the comprehensive portion (at least that's how it was in my case). It didn't go against me as an accident and I didn't get any points for it.

 

[threecrazykids]

I'm not a lawyer, but even if it were covered under an "Act of God" clause, the driver's insurance will most likely pay.

I had something covered under an "Act of God" clause and all that does is make it so the driver isn't responsible under the collision portion of their insurance. It's covered under the comprehensive portion (at least that's how it was in my case). It didn't go against me as an accident and I didn't get any points for it.

That's what I would have thought too. Certainly I wouldn't think the man should be held accountable. I was just surprised when he said the insurance rep he spoke with stated it would likely NOT be paid out due to an "Act of God".

 

[mrsstats]

I think it would be covered under the liability portion of the car owners policy. I never heard of "an act of God" coverage under the liability.

Now for the friend who carries no insurance. It is one thing to self insure his property but I assume he also doesn't carry liability insurance if someone gets injured on his property.

 

[christineann]

It is called "Sudden Medical Emergency" or "Sudden Medical Event" and is a legitimate defense in civil court.

The insurance company for the driver will usually pay for the actual damages though.

 

[scrapquitler]

I am wondering if anyone has knowledge about who pays for what in this scenario.

I have an aquaintance who has some rental properties. He is a cheap *** and doesn't carry any insurance on the properties (they are paid off). Smart "investor" clue #1, right?

Last night a 60+ year old man had a heart attack and drive his brand new truck (literally from the purchase lot home) right through the front wall of one of the houses. My first concern of course was whether or not the poor man was ok, but that isn't the #1 concern of this guy. He's worried only about the damage and how fast it's going to be fixed.

He was afraid at first that the owner wouldn't have insurance, but come to find out he does. He was so excited that the wife of the man had contacted their insurance and opened a claim. He thought all was good and well until he actually spoke with someone from the insurance company. Well, it sounds like the tune has changed.

He is telling me she apparently said that there is a good chance that the insurance company won't be obligated to pay as "sudden illness" is considered an act of God.

He of course is FREAKING OUT because not only do they have a renter who is now living in a hotel (they told her to keep her Feb rent money and get a hotel for now) but he doesn't have that much cash to pay for the property to be fixed.

On one hand, I do kind of agree with him that no matter what he shouldn't be responsible for paying for any of the repairs since they didn't cause it. He said "even if we HAD insurance I shouldn't even have to pay a deductible or anything -his insurance should pay 100% for this"...to which I do agree.

But knowing him, I can't help but feel that karma may just be knocking on his door because he's cheap and wasn't smart enough to carry insurance on these properties to protect HIS investment.

Do any of you know how that would work? Would it be a situation where he'd have to sue this poor old man to have the repairs fixed?

I'm a little confused by the he/him references, but I think that the driver of the car will likely pay (via his auto insurance) for at least SOME of the damage to the house.

Owner of the property it not very smart for not carrying some insurance on the property.

 

[threecrazykids]

I'm a little confused by the he/him references, but I think that the driver of the car will likely pay (via his auto insurance) for at least SOME of the damage to the house.

Owner of the property it not very smart for not carrying some insurance on the property.

Yes, that's what I would think too...meaning that even though this gentleman won't be held liable (sudden medical illness) I would have assumed his insurance would still pay for the damages caused.

And no...he's not smart for not carrying insurance on the property. But if you knew him you'd find that it isn't surprising at all...he's the cheapest person I've ever met, but thinks he's a financial wizard.

I asked him today - "so...theoretically speaking, WHAT IF you had renters in there and the husband went absolutely crazy, burned down the house, all the while killing his wife and kids inside. He goes to jail for life - you're completely OUT of any financial compensation whatsoever unless you think you are going to sue him for his nickel a day he MIGHT make in jail as compensation". His reply? "That's a chance I'm willing to take I guess.".

Genius right there...

 

[lost*in*cyberspace]

I'm a bit confused. Renters insurance covers the personal property of the renter and provides liability insurance if someone is injured in the house. It doesn't cover damage to the house itself from an accident like this.

Your acquaintance seems clueless and foolish.

Hopefully the driver of the car called his insurance company and had coverage before he drove that car off the lot.

 

[starry_solo]

It is called "Sudden Medical Emergency" or "Sudden Medical Event" and is a legitimate defense in civil court.

The insurance company for the driver will usually pay for the actual damages though.

If the driver of the vehicle isn't responsible in court, then the insurance company (for the driver) wouldn't be responsible either.

 

[christineann]

I've worked in the legal field (insurance law) for many years, and often the insurance company will pay for the actual damages (prelitigation/out of court) but not the additional claims. Sorry, I should have been more specific.

Edited to add: And you might be surprised to see what happens in civil court......at times, insurance companies do end up paying out for accidents in which the adverse party was cited. Is that right? Nope, but it happens.

 

[threecrazykids]

I'm a bit confused. Renters insurance covers the personal property of the renter and provides liability insurance if someone is injured in the house. It doesn't cover damage to the house itself from an accident like this.

Your acquaintance seems clueless and foolish.

Hopefully the driver of the car called his insurance company and had coverage before he drove that car off the lot.

The driver of the car had some sort of "sudden medical illness" that rendered him incapacitated. He had to be airlifted to a hospital. The vehicle had to be removed from the middle of the living room and boarded up until it can be fixed.

My acquaintance wasn't referring to renters insurance. I was stating that he's a fool to not carry insurance on the property himself since he owns the place - regardless if any renter opted to have renters insurance or not.

Like I said above...there are MULTIPLE scenarios where that house could be a complete loss and he'd have zero compensation because he wants to save a buck by not carrying insurance on the property simply because he has it paid off.

 

[ruadisneyfan2]

The driver of the car had some sort of "sudden medical illness" that rendered him incapacitated. He had to be airlifted to a hospital. The vehicle had to be removed from the middle of the living room and boarded up until it can be fixed.

My acquaintance wasn't referring to renters insurance. I was stating that he's a fool to not carry insurance on the property himself since he owns the place - regardless if any renter opted to have renters insurance or not.

Like I said above...there are MULTIPLE scenarios where that house could be a complete loss and he'd have zero compensation because he wants to save a buck by not carrying insurance on the property simply because he has it paid off.

I wouldn't call this a case of karma crashing down on him but maybe just gave him a little splash. Sort of a wake up call that something big could easily happen. Maybe he'll see this as a sign. If not, he's an adult and will have to live with his consequences. You can't fix stupid.

I'm no attorney or insurance expert but I would think the car insurance should cover it since it was caused by the driver.
Maybe they don't count it against him like a typical accident since it was a medical issue and not simply careless driving.

I hope the driver and people living in the home are all ok. Property can be fixed/replaced but human life can't be.

 

[lucyem]

It is foolish to not have insurance. You may never need it but that is the point - it is insurance.

I owned a commercial building I rented out. I had insurance (property and liability) and my tenant had insurance (renters and liability). It burnt down last week. Total "act of god". Tenant's insurance is covering his stuff. My insurance is covering my building. I cannot imagine if I did not have insurance. I could not rebuild, actually I would have a hard time paying to have it dismantled. Now imagine if someone had been inside? What if I had no insurance? I could have lost everything including my own home.

 

[ktlm]

It totally depends on the law in your state. In our state, for the other driver to be responsible he would have to be negligent. if it was a sudden heart attack and he had not been under any doctor's advise not to drive due to health conditions, then he is not considered negligent and will not be liable for the damage- it is a sudden and unexpected medical event. The auto liability insurance only covers negligence here, so it would not pay for the damage, nor would the man who had the heart attack be responsible. You friend made a major mistake in not carrying insurance on his rental properties. What if the house burned down or was destroyed or damaged by storm, or a multitude of other things? I don't know how it is in your state, but here renter's insurance is designed to protect contents not the residence itself and the personal liability a renter may have his own negligence, not the property itself. I'm guessing he has no protection without his own policy.

 

[SuzanneSLO]

It totally depends on the law in your state. In our state, for the other driver to be responsible he would have to be negligent. if it was a sudden heart attack and he had not been under any doctor's advise not to drive due to health conditions, then he is not considered negligent and will not be liable for the damage- it is a sudden and unexpected medical event. The auto liability insurance only covers negligence here, so it would not pay for the damage, nor would the man who had the heart attack be responsible. You friend made a major mistake in not carrying insurance on his rental properties. What if the house burned down or was destroyed or damaged by storm, or a multitude of other things? I don't know how it is in your state, but here renter's insurance is designed to protect contents not the residence itself and the personal liability a renter may have his own negligence, not the property itself. I'm guessing he has no protection without his own policy.

Of course it will depend on the state, but the standard is probably not as high as the driver not being negligent unless a doctor advised him not to drive.

However, I agree with the basic core of your response. Sometimes bad things happen and no one else is going to make you whole.

Even if the driver may not be negligent, it is likely his insurance company will pay something to the property owner. It is often less expensive to pay than to fight. But, it will probably not make the property owner whole nor is it likely to be paid quickly.

-- Suzanne

 

[scrapquitler]

Like I said above...there are MULTIPLE scenarios where that house could be a complete loss and he'd have zero compensation because he wants to save a buck by not carrying insurance on the property simply because he has it paid off.

Not to mention the liability he would have if someone got hurt or worse on his property...that could be far more costly and devastating than the property damage.