An insured is separated from her husband. She has been paying the insurance premium on the vehicle he currently drives. She is working on getting everything together for a divorce and would like to stop paying for his insurance. However, her name is not on the title of the vehicle.

Q: If an accident were to occur, would she be liable for anything pertaining to the policy or accident? 

Response 1: First of all, you are asking the wrong question. The policy does not determine if she is liable—the courts do. The question you should be asking is: “If an accident occurred, would she be covered?"

There are a couple of different issues here. The first issue is that, since they are still married, their assets from an auto accident are at risk. So, if his policy lapsed and he is then uninsured, the injured party would go after his assets: his home, his bank accounts, and his future earnings. Assuming those are still shared assets, it could mean financial disaster for her.

Is it possible that both of them could be sued after an accident where he was driving and her name is not on the vehicle? I don't know. That's a question for the courts.

If she were to be named in a lawsuit, would she be covered? If she kept the policy in force, it would still depend on the policy language.

Was she a named insured in the policy declarations? If not, was the definition of “insured" in the policy broad enough to include a non-resident spouse?

The second issue is your errors & omissions coverage. If you are aware that he would become uninsured without his knowledge, you should notify him of that fact. If a situation arose where he was found to be uninsured after an accident, you could be held responsible for failure to notify. It would be different if you never became aware of the situation, but since you are aware, you can't turn a blind eye.

Response 2: Do you mean there is a personal auto policy insuring both the husband and wife for a vehicle title in her name and one titled in his name? The wife should tell the husband to get his own PAP and authorize you to remove him and his vehicle from the PAP that she's been paying for.

Response 3: Does “separated" mean she is legally separated from her husband, or just considers herself separated? That may make a difference in the determination of coverage. 

Second, if she is legally separated, and does not live with her soon-to-be ex-husband, then she no longer has an insurable interest in this vehicle. He might be considered a “permissive" user, depending on the jurisdiction. If he is determined to be a permissive user, then her policy would probably be excess over any coverage she has. 

Third, she needs to cancel this policy if she is legally separated, does not reside with her soon-to-be ex-husband, and no longer has an interest in the vehicle. 

Response 4: Is the husband a named insured on the policy? If so, you would have to get his permission to delete the vehicle. 

Response 5: Assuming she is driving a vehicle insured on the same policy as the husband's vehicle, a possible solution to the premium payment issue may be insuring her vehicle on a separate policy and deleting her vehicle from the original policy. Then change the mailing and billing address on the original policy so that future premium bills go to the husband.

Before taking the above steps, inform both her husband and the attorney—who I'm assuming she's working with “on getting everything together for a divorce"—what she is doing. The same attorney is a good source for an answer to the “Would she be liable?" question.

If “separated" means they are no longer living in the same household, some of the insurance protection offered by their auto policy has likely already been eliminated. A separate policy for each of the separated spouses makes sense.

Response 6: Whether someone can be liable for a separated spouse is a legal question best answered by an attorney. That said, I've heard that when there's a formal legal separation, separated spouses are less likely to be responsible for each other's acts. 

The problem is separated couples rarely obtain a legal separation. The spouse should assume that any jointly owned assets would be at risk until the divorce is finalized. 

To remove the husband and his car, it's important to obtain his permission. Otherwise, you'd want to let the current policy lapse and write a new one for your client. Some insurers are willing to split a policy into separate ones for each separated spouse. 

This question was originally submitted by an agent through the Big “I" Virtual University's (VU) Ask an Expert service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.

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