Preventing Auto Insurance Benefits Forfeiture

Posted in Auto Insurance , Auto Insurance Claims

September 24th, 2009

Even with the best of intentions sometimes accidents do occur, and auto insurance benefits kick in to make all those involved whole again. However, there are situations when auto insurance benefits will be forfeited, and that is caused when the drivers of the vehicles did not do their best to mitigate the chances of an accident occur. Once such example of when auto insurance benefits will be forfeited is if the cause of an accident was determined to be illegal street racing.

Illegal Driving Activities

Most auto insurance providers have a clause in their policies that decree the forfeiture of auto insurance due to illicit driving behavior. For example, Progressive Insurance policies include a clause stating insurance will be forfeited due to “…loss to any vehicle resulting from, or sustained during practice or preparation for: (a) any pre-arranged or organized racing, stunting, speed or demolition contest or activity, or (b) any driving activity conducted on a permanent or temporary racetrack or racecourse.”

Fraud Claims

Auto insurance benefits may also be forfeited if it is determined that a claim made against a company is fraudulent, however this may only occur after a legal proceeding. Oddly enough, if a driver is convicted of drunk driving their auto insurance benefits will not be forfeited and the insurance company will still step up to foot the bill. However, when it comes time for renewal, the insurer may not accept the applicants new policy for insurance and getting covered will become increasingly difficult for the faulted driver.