Question About Progressive Auto Insurance’s Test Drive Exclusion
While test driving a new vehicle, I was rear-ended at a red light. The accident resulted in minor damage to the rear bumper of the car I was driving. The police arrived and confirmed that the other driver was completely at fault. I have Progressive Insurance and promptly reported the incident. They informed me that the dealership’s insurance would take care of the damages, and if that wasn’t the case, my own policy would cover it. Since I live in a no-fault state, I understood that each driver’s insurance would cover their vehicle damages, regardless of who was at fault.
However, a few weeks later, I received a notification from Progressive stating that they have a policy exclusion for damages “to any vehicle being sold or offered for sale by a person engaged in any auto business.” The dealership claims they are not responsible for filing a claim with their insurance due to their test drive agreement. As a result, it seems I might be liable for the damages to the test drive vehicle, despite the accident not being my fault and what I was initially told by my insurer.
Is this how auto insurance policies operate? Test drive agreements are quite common nowadays, so it seems concerning that many people may be driving without insurance coverage during test drives. Are these agreements legally enforceable? Is this issue particular to Progressive? Do I have any options moving forward?
I’m sorry to hear about your situation—it sounds really frustrating. Here’s a general overview of how insurance typically works in scenarios involving test drives, as well as some potential avenues you could explore:
Insurance Responsibility: In many cases, when you’re in a test drive, the dealership’s insurance is intended to cover the vehicle. However, as you’ve discovered, there may be exclusions in your personal auto policy, such as the one from Progressive, that could complicate coverage.
Test Drive Agreements: Dealerships often have you sign agreements that outline what happens in the event of an accident during a test drive. These agreements may state that the customer (you) is responsible for the vehicle while it’s being test-driven. This could be the basis of the dealer saying they aren’t responsible for filing a claim. The enforceability of these agreements can vary based on state laws, and sometimes they can be contested, especially if they’re deemed overly broad or unreasonable.
State Laws: Since you mentioned you live in a no-fault state, your own insurance would typically cover your damages regardless of fault, but this can be contingent on specific exclusions in your policy. Each state has its own rules about what is covered under no-fault insurance, so it might be worth checking the nuances in your state.
Talking to a Claims Adjuster: Since Progressive initially stated that your damage would be covered by their policy or the dealership’s insurance, it might be worthwhile to ask for a claims adjuster or a supervisor to revisit your case. They may provide further clarification or help.
Legal Advice: If you’re still unsure about your obligations and rights, consulting with a legal professional who specializes in auto insurance or consumer protection laws could offer valuable insights. They can help you understand if the dealership’s agreement is enforceable and what options are available to you.
Recourse Options: If you find that the dealership refuses to take responsibility and your insurer maintains that their exclusion applies, filing a complaint with your state’s insurance commissioner or looking into small claims court might be options to consider.
Test driving should indeed come with some level of insurance protection, and it’s worth pushing to find clarity within your insurance policy and the dealership’s responsibilities. Good luck!