Love thy Neighbor

Within our common interest residential communities, news of social events tends to travel somewhat faster than would be the case in larger communities. It is not uncommon for romances to develop by and between our single friends in common interest developments, as a result of the somewhat more frequent contact that occurs in community associations. We can all think of occasions when we have received invitations to attend weddings of one or more of our neighbors. Some of us react with excitement, while others react with dread at the thought of having to pick out a wedding gift under such circumstances. This will offer at least a thoughtful idea in that regard. Invite the couple to immediately review their personal insurance policies prior to exchanging their vows.

Few if any of us are without automobile liability insurance coverage. Indeed, it is the law in California generally that one may not operate a motor vehicle without proof of financial responsibility. For the vast majority of us, that proof is satisfied through the purchase of a personal automobile liability policy. While there is no standard language in the insurance industry for personal auto policies, they do share many traits, such as a general common concept in terms of the coverage afforded thereunder. Personal automobile liability policies (as distinguished from commercial automobile liability policies) are typically thought of as attaching themselves to the person who is insured under the policy as opposed to the coverage attaching to a specific vehicle.

To say it another way, your personal automobile liability policy will typically afford you coverage for claims that are made against you while you are operating any motor vehicle, subject to various exclusions> contained in the policy. It is generally safe to assume that you would be covered for claims by third-parties> against you while you are operating your own motor vehicle. If you happen to get into and drive a friend’s motor vehicle, you may generally assume that your automobile liability coverage will protect you while driving your friend’s car. If you happen to be on vacation and rent a car, you may generally assume that your own policy will afford you coverage for claims made against you under those circumstances. Thus, the insurance protection afforded you under your automobile liability policy attaches to you while operating your own car or most any other car.

Consider then the circumstance of a couple contemplating matrimony when each of them owns a vehicle. Unless it is mere coincidence, it is likely that the couple have different insurance companies (and probably different insurance agents). It would be reasonable and quite common to encounter circumstances in which from time to time, each would each have occasion to drive the others’ vehicle. In general, if one ember of the couple is driving the other person’s vehicle and is involved in an accident, the driver’s insurance policy should step in and afford coverage for liability claims made against the driver. This would make sense as the driver would be the individual primarily responsible for the accident as opposed to the owner.

With this general understanding in mind, however, an unintended and significant gap in coverage may arise the instant that the couple becomes married. Most automobile liability policies provide that the coverage which would otherwise be afforded to the named insured under the policy will not extend to any claims made against the insured while using a vehicle owned by a spouse or family member unless the spouse’s or family member’s vehicle is also scheduled on the driver’s policy. In our hypothetical situation, if Adam is insured by the No-pay Insurance Company, and his soon to be spouse, Eve, is insured by the Slow-Pay Insurance Company, Adam would be covered for liability claims made against him as a result of an accident he becomes involved in while driving Eve’s car until the instant in time when Eve becomes Adam’s spouse. Upon the happening of the marriage, the exclusion contained within most typical automobile liability policies springs into existence and would operate to relieve Adam’s insurance company from defending and indemnifying Adam for the claims made against him as a result of the accident.

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