It is not uncommon for those who purchase insurance coverage in New York to be shocked when a claim on the policy is denied. Many think the insurance company is acting in bad faith or is somehow deceiving them, but often, the truth is simply that the customer did not read the policy or ask important questions when purchasing the coverage. Customers may think they can save money on a policy by keeping information from the insurer, or they may simply fail to understand the exclusions in their policies.
One example of this occurred in another state when a woman's 26-year-old son was in an accident while driving her car around 3 a.m. one Saturday morning. The accident was a hit-and-run, and no one witnessed when another vehicle allegedly made a wide turn and collided with the woman's car, severely damaging the car and inflicting a deep cut on the son's arm, which required stitches. The woman submitted her claim to her insurance company and was incensed when the company refused to pay.
Apparently, the son had been delivering pizzas when the accident occurred. There was an exclusion in the woman's policy that does not cover vehicles when they are used for business purposes. Cars used for deliveries, for example, require commercial coverage since they have a different risk than those who drive for other purposes. It is possible that the woman's insurer had affordable options if she had inquired about them.
While the woman was upset that the insurance company did not cover her son's accident even though she misread her policy, the company has no legal obligation to do so if the policy clearly noted the exclusion. Nevertheless, customers who fail to examine their policies may attempt to claim compensation by bringing action against the insurer. In these situations, having an experienced New York attorney may benefit the insurance provider.
Source: southbendtribune.com, "Drivers beware: you may not be covered by insurance when using car for work purposes", Ted Booker, Oct. 27, 2017