Concern About Progressive Auto Insurance Test Drive Exclusion
While taking a Tesla for a test drive, I was rear-ended at a red light by another driver. Fortunately, the accident was determined to be 100% the other driver’s fault, and it resulted in only minor damage to the rear bumper of the vehicle. I promptly informed my insurer, Progressive, who indicated that the dealership’s insurance would cover the damages. If the dealership didn’t take responsibility, they assured me that my own policy would kick in. Since I’m in Michigan—a no-fault state—I believed that each driver’s insurance would cover their vehicle’s damages regardless of liability.
However, weeks later, I received a notice from Progressive indicating that their policy has an exclusion for damages to any vehicle being sold or offered for sale while in the course of an auto business. Under this definition, “auto business” includes selling, leasing, or testing vehicles.
The dealership claims they’re not liable for filing a claim with their insurance due to the terms of their test drive agreement. This leaves me in a difficult position, as it seems I might be responsible for paying for the damages to the vehicle I was test driving, despite being assured by my insurer that I would be covered.
Is this how auto insurance policies typically operate? With so many people test driving vehicles regularly, is it possible that many are doing so without adequate coverage? Are test drive agreements enforceable, and is this issue unique to Progressive? What options do I have moving forward?
I’m sorry to hear about your situation; it sounds frustrating. Let’s break this down.
Progressive’s Exclusion: It’s true that many auto insurance policies contain exclusions for vehicles used in a business context, including test drives. This is a standard clause you may find in various insurance policies, not just with Progressive. Essentially, it means that while you’re covered for a lot of situations, the insurer isn’t liable when it comes to vehicles that are part of a business transaction.
Test Drive Agreement: Many dealerships have specific agreements that outline each party’s responsibilities during a test drive. If your test drive agreement states that you are responsible for any damages incurred while driving the vehicle, that could complicate things. However, it’s essential to understand the exact language in the agreement and if it’s legally enforceable under Michigan law.
Dealership’s Liability: Typically, dealerships are expected to have insurance coverage on their vehicles, including those being test-driven. If the dealership’s agreement relieves them of responsibility for damages during a test drive, it could be problematic for you. Nonetheless, dealerships may still carry insurance that covers test drive incidents, and you might want to push them on this, especially since the other driver was at fault.
Recourse: Since the accident was the other driver’s fault, you want to ensure you pursue a claim with their insurance. You might also consider seeking legal advice if you feel the dealership is evading responsibility. Consulting with an attorney knowledgeable in Michigan’s auto insurance laws might provide clarity on your obligations and potential avenues for recourse.
General Advice: Claims situations like this can be complicated. Document everything—keep all correspondence with both the dealership and Progressive, and take notes about what was communicated to you. If possible, consult your insurance policy for detailed coverage information, and consider reaching out to a consumer protection agency or insurance commissioner in your state for further guidance.
It’s definitely confusing, but understanding your rights and obligations can help you navigate this situation better. Good luck!