San Diego man's car insurance retroactively canceled after he got in an accident

A San Diego family has learned the hard way why it’s important to know every detail about your car insurance and to keep it updated. 

Sergio Preciado got in a car accident back in July of 2022 when he was exiting Interstate 805. He admits it was his fault, adding that nobody was injured in the crash.

Preciado exchanged information with the other driver and reported the accident to his insurance. An adjuster then called for details about the crash and other information, asking if anybody else over the age of 14 lived with him, and he told them his daughter and son, neither of whom had a driver’s license at the time, were also residents of his home.

His insurance company, National General, later told him in a letter that, since Preciao had not named his son as an excluded driver, his policy was being rescinded, and, as a result, his claim was denied and his premium was refunded. The company did not respond to NBC 7's calls and emails about this case, citing customer privacy.

As a result, Preciado was on the hook for almost $5,000 in damages to the other vehicle. 

“What does my son have to do with the accident?” Preciado asked over and over, also mentioning that “he wasn’t driving, he wasn’t with me at the time of the crash, he doesn’t drive at all since he has no license. So why name him?”

As Jazmin Ortega with the California Department of Insurance (CDI) said, “It’s not one of the main considerations for setting the rate or the premium, but it is a secondary consideration.”

Ortega said that some insurance companies like National General want to know who has access to a vehicle at any given moment, regardless of whether they're licensed or have permission to use it. 

The California Department of Insurance's investigation into Preciado’s claim didn’t find any wrongdoing by National General, a reminder, Ortega said, that we should all be aware of similar types of provisions in policies. This includes roommates, no matter how close they may be relationship-wise, people living with you temporarily while they search for their own residence, and college students who return home intermittently, even if it's only for holidays

“So they’re not home full-time, but if they’re licensed and they have access to the vehicle when they’re home, they should be included in the policy,” Ortega said.

At the very least, they should be named as an excluded driver, according to the CDI. 

Here's what insured drivers should do: 

• Review the details of your policy, especially if you have anyone over the age of 14 living at home 
• Make any necessary updates (and do so regularly in the future)
• If you have any doubts, consult your insurance company — it's better to ask questions before than after an accident 

“There are so many variables to each insurance policy ... it's hard to give a general response that would apply to everyone,” Ortega said.

Preciado admits he hastily filled out the forms when he applied for auto insurance. Now, though, he’s scrambling to pay for the damages he thought were covered by his policy.