The Borrowed Pickup, Regular Use, and a Late UM Tender
A personal auto policy issued to grandfather Leo lists a 2019 pickup with liability limits of 100/300/50 and UM/UIM of 100/300. Leo's grandson, Marcus, has his own auto policy with 25/50/25 liability and 25/50 UM. Marcus's car is in a body shop, so Leo lets him drive the pickup for three weeks; Marcus pays $200 toward fuel and uses the truck daily for his landscaping job. On day 18, an uninsured driver runs a red light and strikes the pickup. Marcus has $85,000 in medical bills. Marcus's insurer denies his UM claim, citing the regular-use exclusion for a non-owned auto. Leo's insurer questions coverage because Marcus had the truck for an extended period and because the accident was reported 45 days late. Marcus also demands the $100,000 UM limit from Leo's policy and asks whether he can stack his own UM coverage. The public adjuster is asked to evaluate the UM claim.
1. Is Marcus an insured under Leo's policy, and does the regular-use exclusion bar his own UM claim? Explain the stacking question.
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Leo's policy defines an insured for UM as a family member and a person occupying a covered auto. Marcus had permission, so he is an insured under Leo's UM coverage while in the pickup. His own policy's regular-use exclusion is the problem: a non-owned auto furnished for his regular use is typically excluded. Three weeks of daily use for landscaping, plus the $200 fuel payment, supports regular use, so his own UM claim likely fails. Without UM under his own policy, there is nothing to stack. Leo's UM limit is $100,000; the $85,000 medical bill is within that limit, subject to any other UM payments, deductibles, and policy terms. The PA should not assume stacking just because Marcus has his own policy.
2. How should the 45-day delay in reporting affect coverage, and what should the public adjuster do?
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Late notice is not an automatic denial. The carrier must show it was prejudiced by the 45-day delay, especially where a police report and medical records exist. The PA should obtain a recorded statement explaining the delay, gather the police report and medical records, and show whether the carrier could still investigate. Tender the UM claim formally in writing. If the carrier denies on late notice, demand a written explanation of prejudice. Do not let the liability carrier's delay excuse the UM carrier's own investigation. Keep a timeline of when Marcus was treated, when he retained the PA, and when each carrier received notice.
3. If Leo's insurer pays its $100,000 UM limit, can it seek contribution from Marcus's insurer? What limits and offsets should the PA analyze?
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If Marcus is not an insured under his own UM policy, his own carrier owes nothing and there is no contribution. If a policy also covers him as an excess carrier, other-insurance clauses usually make the occupied vehicle's UM primary and the other policy excess or pro rata. The PA should send a written tender to both carriers, request declarations pages and other-insurance clauses, and calculate the maximum available UM limit before demanding $100,000. The $85,000 medical bill may also be reduced by PIP, med-pay, workers' compensation, or health insurance; UM pays damages, not duplicate medical bills. Confirm whether the UM limit is per person or per accident and whether any setoff applies.