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Third-Party Liability and Secondary Sharing

This page collects rules for incidents involving another party, no-fault states, uninsured motorists, subrogation, and situations where GDC applies as secondary.

When another party appears at fault

When an accident involves another party who appears to be at fault, members are generally required to first seek compensation from the at-fault party's insurance company.

Process:

  1. File a claim with the at-fault party's insurance company first.
  2. If that insurance company denies the claim or does not fully compensate the loss, the member may apply for GDC Sharing for the uncompensated portion.
  3. GDC determines what part of the deficit may qualify as an eligible event.

Any loss that can be compensated by the at-fault party's insurance company should be handled by that insurer first. If the insurer denies the claim or fails to fully compensate the loss, members may apply for GDC Sharing for the remaining eligible portion.

If a member is unsure who was at fault, the member can report the accident to GDC. An Auto Damage Specialist reviews the situation and advises next steps.

When contacting the at-fault party's insurance company, members should clearly explain that they do not carry Collision or Comprehensive coverage and need the at-fault party's insurer to handle the claim directly.

Subrogation and recovery

GDC is not an insurance company and does not have the legal right to subrogate against another insurance company.

Members must first seek compensation from the liable third party, if any, for vehicle losses before applying for a sharing request from the Good Driver Club program. Any amount recovered from the third party will be deducted from the eligible sharing amount.

Michigan and no-fault states

One Michigan exception applies:

  • In Michigan, if a member has Collision coverage, the member must go through their own carrier, regardless of fault.
  • If the member does not have Collision coverage and the other party is at fault in Michigan, the member can go through the at-fault party's Liability insurance for property damage.

For no-fault states, no-fault rules require PIP insurance for injuries regardless of fault. The at-fault party is still responsible for property damage to the member's vehicle. The member must file a claim with the at-fault party's insurance carrier first. If there is still a financial deficit, the member can report the loss to GDC and GDC will determine what portion may qualify as an eligible event.

Uninsured motorist and UMPD

The GDC quote does not include uninsured motorist coverage.

If a GDC member is hit by an uninsured motorist, the member must first prove:

  • The at-fault party does not have insurance.
  • The member does not have UMPD on their primary insurance.

If those conditions are met, the member is eligible for sharing through GDC.

When GDC applies as secondary

GDC is not insurance. In certain situations, GDC may apply as secondary.

Liability insurance pays for damages caused to others and is required by law. GDC applies to a member's own vehicle.

If a GDC member has active first-party coverage, such as collision, comprehensive, or uninsured/underinsured motorist property damage, GDC acts as secondary for eligible events. In that situation, the member may need to file a claim with their insurance provider before reporting to GDC. If there is still a financial gap after the insurance claim, GDC determines what portion may qualify as an eligible event.

For a rental car accident while traveling, GDC is fifth in line. The required order is:

  1. The other driver's insurance, if they are at fault.
  2. The member's own auto insurance, if the member has full coverage.
  3. The rental company's Collision Damage Waiver.
  4. The credit card's rental Collision Damage Waiver, if available.
  5. GDC sharing, if none of the first four options apply.

Out-of-pocket waiver and Supplemental Transportation Assistance in third-party claims

When a member applies for GDC sharing after a third-party claim, the member's Out-of-Pocket amount may be partially or fully waived based on the percentage of the member's losses compensated by the other party.

Rental expenses should first be submitted to the at-fault party's insurance company and may be eligible for GDC Sharing if the at-fault party's insurer declines to cover them.

For unusually long third-party claim-processing times, or for members who do not have GDC Transportation Assistance, GDC may provide Supplemental Transportation Assistance of:

  • Up to $40 USD per day.
  • Up to 60 days.

Supplemental Transportation Assistance is funded through direct community sharing and does not reduce the member's Remaining Pledge Balance.

In most cases, opening a claim with the other driver's insurance company only takes a few minutes. If the insurance company denies the claim, the member does not need to continue disputing the decision and may apply for GDC Sharing.