Progressive Auto Insurance Test Drive Exclusion
I was recently involved in an accident while test driving a Tesla—another driver rear-ended me while I was stopped at a red light. The impact caused minor damage to the rear bumper, and after involving the police, it was determined that the other driver was at fault. I have coverage with Progressive Insurance and promptly informed them about the incident. They assured me that the dealer’s insurance would handle the repairs, and if it didn’t, my own policy would cover it. Since I live in Michigan, a no-fault state, I understood that each driver’s coverage would manage the damages, regardless of who was responsible.
However, I later received a notification from Progressive highlighting an exclusion in their policy. It stated that they are not liable for damages “to any vehicle while being sold or offered for sale by a person engaged in any auto business.” According to their definition, “auto business” includes selling, leasing, repairing, parking, and test-driving vehicles.
The dealership is now claiming they won’t file a claim with their insurance because their test drive agreement states they aren’t responsible for damages. This situation suggests that I might need to cover the repair costs for the test drive vehicle, despite being innocent in the accident and following the instructions from my insurer.
Is this how auto insurance works? Test driving vehicles is a common practice, yet it seems like many people could be driving without adequate insurance coverage due to these agreements. Are such exclusions enforceable? Is this a unique issue with Progressive, or are other insurers similar? What options do I have in this situation?
I can understand how frustrating this situation must be for you. The details surrounding insurance policies and test drive agreements can definitely be confusing. Here are some key points to consider:
Exclusion Clause: Many auto insurance policies, including those from Progressive, often contain exclusions for vehicles that are being tested or are for sale. This is usually because the dealership should have insurance coverage in place for their vehicles while they’re in the hands of potential buyers for test drives.
Dealership Responsibility: Typically, the dealership should hold liability for damages incurred during a test drive as part of their business operations. However, if their agreement states that the test driver (you) assumes responsibility for potential damages, that might complicate things.
State Insurance Laws: Since Michigan is a no-fault state, you might think that your insurance would cover you regardless of the other’s fault. However, the nuances in policies and the specific exclusions like those from Progressive can come into play.
Communication: It’s wise to clarify with both your insurance agent and the dealership. Request them to provide you with their insurance policies regarding test drives. Ensure you communicate clearly that the accident was not your fault, and the police report supports this.
Seeking Recourse: You may have a few options:
File a complaint with your state’s insurance commissioner if you believe the insurance company is not covering you as they should.
Negotiation: In some cases, if the dealership does not want to file a claim, they might still be willing to assist you with further negotiations with Progressive or provide support to remedy the situation.
Ultimately, while test drives often carry specific agreements and conditions, it’s crucial to not feel trapped if something feels unfair. Gathering information and seeking advice from professionals in the field can help clarify your rights and options in this matter.