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Does insurance pay DUI related claims?

zoosermomzoosermom Registered User Posts: 26,136 Senior Member
edited May 2012 in Parent Cafe
There's a high profile case here in which a young guy borrowed his parents' Mercedes, got drunk and then crashed into the home of an unrelated elderly woman. The house, which was probably very nice and valuable, is now being condemned. I was just wonder if insurance companies have to or do pay for damaged incurred when someone chooses to drive drunk. Anyone know?
Post edited by zoosermom on
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Replies to: Does insurance pay DUI related claims?

  • engineer4lifeengineer4life Registered User Posts: 422 Member
    Driving a car into a home usually shouldn't cause it to be condemned, although it might need to be repaired.

    Generally insurance excludes driving under the influence claims.
  • zoosermomzoosermom Registered User Posts: 26,136 Senior Member
    The house is being condemned. That is not the question, it has already been decided. The car came in one side and out the other.
  • parentofpeopleparentofpeople Registered User Posts: 1,326 Senior Member
    Are you asking about the repair cost on the dui driver's mercedes or the homeowner's damages that they caused?

    I would think the driver's liability policy will cover damage they cause regardless of the DUI, I don't know for sure about the damage to the policy holder's property. That would depend how their policy was written.
  • zoosermomzoosermom Registered User Posts: 26,136 Senior Member
    I'm wondering about the elderly lady's house. She went to bed with a valuable house and woke up with a stranger's car having gone through it and having it condemned. I'm just wondering who would pay for that.
  • emeraldkity4emeraldkity4 Registered User Posts: 35,861 Senior Member
    Wouldnt her ins have to pay for it, as it would if a neighbors tree fell on her house?
  • parentofpeopleparentofpeople Registered User Posts: 1,326 Senior Member
    The driver's liability portion of their policy will cover the house damage up to the amount of their policy. If the damage is more than that she will have to sue them (the car owner) for the difference and hope that they are worth enough to cover it. Terrible situation for all involved!

    If the car owners also have a PUP (Personal Umbrella Policy) that will help with covering the claim amount over and above the liability limit on their auto policy.
  • mom2collegekidsmom2collegekids Forum Champion Financial Aid, Forum Champion Alabama Posts: 83,795 Forum Champion
    I would imagine that her insurance is going to go after his insurance for the property loss. If he doesn't have enough insurance to cover that, then maybe her insurance will pick up the difference?

    If she has a mortgage on the property, the mortgage holder is going to insist that the home be rebuilt.
  • zoosermomzoosermom Registered User Posts: 26,136 Senior Member
    I don't know. That's what I'm curious about since it was the result of an illegal act. Many homeowners policies have all sorts of disclaimers and limits of liability. A house in an upscale area of Long Island can really be pricy.
  • engineer4lifeengineer4life Registered User Posts: 422 Member
    I'm wondering about the elderly lady's house. She went to bed with a valuable house and woke up with a stranger's car having gone through it and having it condemned. I'm just wondering who would pay for that.

    Her property insurance would pay for the repairs / replacement of the house. Then her insurance company would sue the owners of the vehicle as well as the driver (and their insurance company) for any damages. The auto insurance policy would pay first (if allowed), and then the family's umbrella insurance would kick in (again, if allowed), and then the family would be personally liable for the remainder.

    In any event, many people do not carry high enough property damage insurance for the auto insurance to pay very much. Most people carry around $25k, which won't pay for very much. Mine is much higher but still wouldn't cover a house. The umbrella insurance would pay for the bulk. Again, it all may be for not since the incident occured under influence.

    It's a good reminder why a homeowner needs a homeowners insurance policy.
  • engineer4lifeengineer4life Registered User Posts: 422 Member
    A house in an upscale area of Long Island can really be pricy.

    Insurance won't pay for the purchase price of the house, it'll simply pay for the cost of repairs / rebuilding.
  • NYMomof2NYMomof2 Registered User Posts: 5,996 Senior Member
    The reason that a LI house is pricey is the value of the land/area. The actual costs of constructing/reconstructing a house don't vary as much around the country as the value of land does.

    Still, it's going to be a lot of money. It is expensive just to tear down a condemned building. I can't imagine how stressful this must have been for the elderly woman to lose the home she's probably lived in for many years.
  • engineer4lifeengineer4life Registered User Posts: 422 Member
    The driver's liability portion of their policy will cover the house damage up to the amount of their policy.

    Correct, but only the "property liability" and not the "injury liability". The big difference is the limits often are different on the two, with the property liability being much lower than injury liability.
  • engineer4lifeengineer4life Registered User Posts: 422 Member
    Many homeowners policies have all sorts of disclaimers and limits of liability.

    A homeowners insurance policy should not have all sorts of disclaimers and limits of liability. Liabilty should be limited when the homeowner causes the damage, but generally be unlimited in all other respects.

    For example, arson and burglary are both illegal acts, but you expect insurance to pay for that. Earthquakes, tornados, and hurricanes are acts of God, but you need an insurance policy that will cover those to rebuild your house should you live in an area prone to those.

    Flooding is typically excluded, but you can buy flood insurance from the US Government if you live in a flood zone.

    You need an insurance policy that will cover the damage to your house, otherwise, it's not the right insurance policy.
  • zoosermomzoosermom Registered User Posts: 26,136 Senior Member
    For example, arson and burglary are both illegal acts, but you expect insurance to pay for that.
    The difference is that there is car insurance that will also come into play here, which is not the case with regard to arson or burglary. Also, burglary wouldn't lead to the condemnation of a house.
  • engineer4lifeengineer4life Registered User Posts: 422 Member
    The difference is that there is car insurance that will also come into play here, which is not the case with regard to arson or burglary. Also, burglary wouldn't lead to the condemnation of a house.

    Homeowners insurance should be the primary insurance, and then the homeowners insurance company can attempt to collect from other insurance companies if it is able to. However, the homeowners insurance policy needs to pay for the cost of rebuilding - as well as temporary housing - even if they are not able to collect from the person causing the damage.
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