In our law practice we are always going up against insurance companies. Some people might come to believe that insurance companies are more likely to play hardball with the little guy – that insurance companies think that they can get away with not paying. That would be wrong. Insurance companies don’t care if you are an individual, a corporation, or that you are Portuguese, Italian, African or Chinese. They are completely neutral – to them it’s just business –if they see an opportunity to avoid paying they will take advantage.
The perfect example of this is when you see two insurance companies suing each other – which actually happens quite frequently. For example – the Rochon family lived in a small Ontario town (Rochon v. Rochon). Their son, who lived with his parents at home, was in the garage working on his new car. The car caught fire and caused 150 thousand dollars in damage to the garage and its contents.
The home insurance of the Rochons paid for the damage. Keep in mind that as a son living at home the son was also insured under the home owner’s insurance policy. But then the home insurance company in the name of the parents sued the son alleging that the damage was caused by the use and operation of the motor vehicle – the son’s automobile insurance company defended. The interesting thing about this case is that in such cases the insurance companies do not sue each other in their own names — they sue in the name of their own insureds – so although the lawsuit was the parents suing the son – it was the insurance companies behind the claim and the defence. For example if a car smashes into your house your insurance company pays you for the damage caused and then using your name your home insurance then sues the driver and owner of the automobile — but it is actually the driver’s automobile insurance that defends even though the driver’s insurance company is not named as a defendant.
In the Rochon case the judge found that the home owner’s insurance company could not recover from the auto insurance company. Even though the home insurance sued in the name of the parents naming the son as a defendant the lawsuit was the same as the son suing under the home insurance against himself under the auto insurance. The son, as I mentioned above, was also an insured under the home insurance policy. And since you cannot sue yourself the claim was dismissed.
I suppose that one way to avoid this kind of trouble is to insurer both your automobile and your home with the same insurance company. Apparently you might get a better rate in any event.