A carpool group has decided that just one of the group would always be the driver, always in his own car. The gas/maintenance costs which he charges them is well above the actual costs, so he makes a profit. He gets extra liability insurance to cover injuries to any of the carpool members in case of injury in an accident. An accident occurs and a member is injured. Can the insurance deny a claim on the grounds that the driver/owner, who was overcharging his carpool partners and making a profit, was operating an illegal car-for-hire business, and therefore had fraudulently represented himself to the insurance company?
1 Answer from Attorneys
Maybe. But who's going to tell the insurance company? And truth to tell, even when the vehicle is a dollar van, the insurance company will generally pay, even a hard case like Allstate.
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