Insurance contract language(almost as long as the policy!)

[Mike Capaldo <madsman@xxxxxxxxxxxxx>]

>Date: Sat, 23 Jan 1999 20:01:26 EST
>From: DKoelmelM3@domain.elided
>Subject: STATE FARM INS./ POLICY CHANGE WITH LATEST PREM. NOTICE
>
>I just received by semiannual prem. notice for my M-3 (which actually went
>down) but with the typical insert with notice to certain policy changes such
>as '' THERE IS NO COVERAGE WHILE  VEHICLE IS OPERATED IN, ENGAGED IN PRACTICE
>FOR, OR IS BEING PREPARED FOR ANY RACING OR SPEED CONTEST. THIS APPLIES WHILE
>THE VEHICLE IS OPERATED OFF PUBLIC ROADS ''  *This sounds like drivers
>schools. I have done several schools and planned on a few this year but can't
>take the financial chance if this new policy change could be used against me
>in a legal confrontation. Hope for some opinions from some lawyers or
>insurance Exec. on our list.
>
>

Okay, firstly, for the obligatory disclaimers - I do not represent the
company mentioned in the above captioned e-mail- 

In order to ascertain just what it is they're saying when you're reading an
insurance policy, it's imperative to check the policy definitions page,
which is usually at the beginning of the policy. This is where th co
explains what words like "vehicle", "insured," etc mean...and perhaps even
"practice or being prepared for". When there's an amendment to the policy,
there may not be a change in definitions, or it may be on another separate
sheet of paper ( all of which are headed " This changes your policy - keep
this with your policy", or words to that effect ).

Driving schools are , by definition, not racing or speed contests... but,
what does "Practice or being prepard for" mean? Qualifying? Testing, or
dialing in the car prior to a speed contest? Changing to auto-x tires in a
parking lot?

 If anything, at a driving school, the driver is being prepared, not the
vehicle...and if driving schools are the only activity the car and driver
participate in, I don't think the exclusion would apply. The way this
works, however, is that if the co thinks it DOES apply, they'll disclaim 
( deny coverage).  I think that the co would probably disclaim for a
driving school , but might find it difficult to defend their actions,
especially if there wasn't a clear definition that included driving schools
as a proscribed activity.

There is no doubt in my mind that this means no coverage for auto-x,
however, and while the co's intent may not have been to achieve this end,
it would seem to be the effect.

Here's what you should do to clear this mystery up - send a copy of the
endorsement to your agent, and request a written clarification of the
question.In your letter, you should point out that you would like to
participate in driving schools, and are concerned that you might not have
coverage, based upon your reading of the amendment. He ( or she) should
contact the claims dept to obtain their interpretation. Save whatever he
sends you as a reply.

Also bear in mind that if I'm correct about the effect on auto-x, there
would be no liability coverage either...so if you clip a pedestrian in the
prep area, or some other tragedy were to occur, the co could disclaim.
Mike Capaldo
CCA # 114323
'97 528i 5 speed, with every option known to man
'96 454 Suburban ( 390 ft lbs of torque - same as the new M5!); looking for
something to tow
'98 Chrysler Sebring Convert - STILL waiting for them to send me my three
pointed star, now that the merger's reality
'92 Golden Retriever - the Sedan de Ville of dogs 

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End of bmw-digest V9 #892
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