Imagine that your elderly parent is still keeping her prized mint condition 1973 Buick Riviera in the garage. Unbeknownst to you she has also continued to pay the insurance on the vehicle though she no longer has a valid driver’s license. Her favorite seventeen year old grandson begs her to let him drive it around the neighborhood and she, in a moment of wistful memories of you learning to drive that car, agrees. She is oblivious to the fact that he does not have a valid license, having not yet obtained a permit. He drives around the block, waves at his friends and rear-ends an ice cream truck, injuring himself and the driver.
This should be okay because grandma has insurance right? Well, in Illinois, several insurance companies involved in incidents like this scenario disagreed. They felt that they had no duty to defend or indemnify drivers who had no or an invalid driver’s license as there were written provisions in the policies that disallowed coverage for bodily injury and property damage from the use of a vehicle where the driver did not have “reasonable belief” that they were entitled to operate the car.
Earlier trial courts ruled in favor of the insurance company’s claims that they were not liable because the words reasonable belief would be defined by most people to be anyone with a valid driver’s license. Instead, the Illinois Supreme Court considered the word entitled to be ambiguous, agreeing with the drivers who claimed the word meant anyone who was authorized, or permitted by the insured, to operate the vehicle. The court ruled that the insurance companies could not use the exclusion clause to deny coverage to an unlicensed driver and had to pay the claims.
Read your policy carefully before allowing anyone to operate your vehicle. Make sure you know who is covered by the policy and always check to see that the person you lend your car to has a valid license. If you are in an accident and your insurance company denies your claim, consider consulting with an attorney before you sign any paperwork.