Warning Regarding Auto Insurance and Children

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Viewing 26 posts - 1 through 26 (of 26 total)
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  • #608156

    yitzyk
    Participant

    My son has a driver’s License and just turned 18. He does not have a car and does not drive our family car (yet.) He Dorms in Yeshiva and is not usually home. I contacted my insurance company just to ASK how much it would cost to add him to my insurance, to decide if I would allow him to drive our car.

    BIG MISTAKE!!!! (unless you can afford it)

    As soon as they find out that you have a licensed child, they AUTOMATICALLY add him to your plan, unless he lives more than 100 miles from home, or has his own car and insurance! You do not have any choice!! In my case, it caused my insurance to double, and that is just the basic minimum coverage.

    So if your child does not yet have a license, don’t rush to get them one. If they do, and you don’t plan on allowing them to drive your car yet, DON’T inform your insurance company, even if it just an inquiry.

    I don’t know if you are legally required to notify them anyway, in which case it is not my intention to advise anyone to violate the law.

    #998474

    popa_bar_abba
    Participant

    The more important question is whether you are contractually required to inform them, in which case they can deny coverage when you need it, even if you were the one driving.

    Don’t play games with insurance. It isn’t worth it. That’s why we buy insurance.

    #998475

    oomis
    Participant

    I am a little surprised at this. When my son got his license, he was leaving for E”Y for the year. We notified the insurance co. about his licensing, but ALSO informed them that he would be out of the country for a year, as a student and therefore not driving our car at all. They requested a copy of his acceptance and registration for the yeshivah, and told us to inform them when he returns and will be driving our car again. Our insurance premiums did NOT change at all.

    #998476

    HaKatan
    Participant

    As popa said, don’t play games with insurance. In addition to being honest, the potential material consequences for not doing so are not fun.

    I thought I’ve heard that some insurance companies might allow an affidavit that the child does not drive because he’s in school even the school is not > 100 miles away. If you’re not happy with your current insurer’s policies, then inquire about other insurers and perhaps switch to a different insurer.

    Oomis, the key there is “and told us to inform them when he returns…” In my understanding, they assume that anyone who has a license will drive at some point regardless of parents’ wishes to the contrary. Therefore, they want the child on the policy too even if you really believe he will not drive.

    The savings of not having to have him on the policy can help defray the out-of-town Yeshiva costs, I guess…

    #998477

    lammed hey
    Member

    The standard Auto policy will cover your “Family Member” (although there are some that will not), even if they are not a known operator. However, being that all operators are supposed to be on the “declarations” page, if someone “forgot” to add an operator, that operator may be denied (especially if there is a large claim) if they were operating the vehicle at the time. Furthermore, if the company asks for the names of all operators and there is an omission, that would be fraud and the company would probably deny your claim.

    As an additional point, if your son drives someone elses car, he may not be covered either unless the named insured (parent or spouse) allows them to drive on an occasional basis. If your son’s friend allows him to drive an auto under his parents’ policy, their auto insurer is within their rights to deny coverage (reasonable belief exclusion).

    My suggestion to you is to speak to your agent about placing your child on as a “non principal operator”, which can significantly lower his premium.

    (Let me note that none of this should be construed as legal advice).

    35

    #998478

    mms601
    Participant

    Get an insurance broker whom you can ask these questions without getting in trouble. Also consider switch insurance companies.

    #998479

    akuperma
    Participant

    GEICO (which is one of the major insurance companies) doesn’t penalize you if the kid is away from home (e.g. in Israel). Indeed, one trick we learned was to have the kids get their licenses just before going to Israel. During the first year they would be listed on the insurance but only as a student away at school. When they came home, they would have a year of accident-free driving on their driving.

    Of course, unless you live in a rural area, one might ask why a child nears a drivers license in the first place. It’s something of a luxury.

    #998480

    a mamin
    Participant

    They are able to find out themselves, without you declaring. When I renewed a policy they automatically put on 2 married sons not living with us. They asked me to send them copies of their registration and car insurance to get them off our policy.

    #998481

    lammed hey
    Member

    GEICO (which is one of the major insurance companies) doesn’t penalize you if the kid is away from home (e.g. in Israel).

    The problem here is that his son is learning in Lakewood (e.g.), and within 100 Miles of home. No company that I am aware of includes children that are overseas as operators.

    #998482

    popa_bar_abba
    Participant

    Of course, unless you live in a rural area, one might ask why a child needs (sic) a drivers license in the first place. It’s something of a luxury.

    I think it is rather important to teach your kids how to drive. The friends of mine who weren’t driving when they were teenagers, ended up being poor and inconfident drivers.

    I think it is a skill worth learning, and worth the extra few hundred dollars a year.

    #998483

    ED IT OR
    Participant

    A LETTER FROM THE SCHOOL WHICH BANS DRIVING SHOULD WORK…

    #998484

    Curiosity
    Participant

    The friends of mine who weren’t driving when they were teenagers, ended up being poor and inconfident drivers.

    PBA: I wasn’t aware driving young is a segulah for parnassah! 😉

    (Snort)

    #998485

    yehudayona
    Participant

    When my daughter got her license, I called the broker and even faxed her driver’s ed paperwork. When she went off to Israel, I called them to inform them, only to find that they had never put her on the insurance in the first place.

    #998486

    zecharya
    Member

    I heard from an insurance broker that if you don’t put them on your policy when they’re young, then later on when they take out their own policies, they will be put into the “assigned risk” and pay much higher premiums. The reason is that they’ve never established their own driving records.

    So perhaps it’s better to bite the bullet now and pay the higher premium now than to put your child into an undesirable position in the future.

    #998487

    ProudMom2
    Member
    #998488

    hakohen53
    Participant

    Most of you have no knowledge of what you write and are just repeating things that you heard. This is very dangerous. Some misleading statements were made, especially since different laws govern in different states. For instance, in NYS you cannot waive or remove the personal injury protection part of the coverage. It is mandatory – and your own health insurance will not cover you for injuries sustained in a car accident.

    I never advised my carrier whenever my kids got a license. When they found out (usually after an accident) they then raised my premium. They could have also cancelled or non-renewed the policy if they wanted. But, at least in NYS, the company could only do that prospectively, meaning that they have to give advance notice before the cancellation or non-renewal can go into effect. They cannot cancel or non-renew the policy after the accident for it to go into effect before the accident. In NYS, they would still have to cover the car and the driver for the accident. They have to cover ANY driver of the car involved in an accident as long as the driver had the permission and consent of the owner to drive the vehicle at the time.

    #998489

    lammed hey
    Member

    For instance, in NYS you cannot waive or remove the personal injury protection part of the coverage.

    There is a world outside NYS (and Michigan). In NJ & PA, there are multiple tort options that can save an insured money in exchange for limiting tort rights. In NJ as well, you can buy more or less personal injury protection (PIP). Even in NY, you can add a PIP deductible, and drop optional PIP (which does exist).

    But, at least in NYS, the company could only do that prospectively, meaning that they have to give advance notice before the cancellation or non-renewal can go into effect.

    See note above. In general, case law does agree, with the exceptions that I mentioned earlier regarding fraud and/or misrepresentation. However, once again, it does not mean that the insurer will not try to deny your claim (and do you really want to go to court?)

    #998490

    lammed hey
    Member

    I never advised my carrier whenever my kids got a license. When they found out (usually after an accident) they then raised my premium.

    As I said earlier:

    As an additional point, if your son drives someone elses car, he may not be covered either unless the named insured (parent or spouse) allows them to drive on an occasional basis. If your son’s friend allows him to drive an auto under his parents’ policy, their auto insurer is within their rights to deny coverage (reasonable belief exclusion).

    #998491

    RushLimbaugh
    Member

    What if a kid whose parents doesn’t own a car (or have insurance) drives someone elses car and gets into an accident?

    #998492

    lammed hey
    Member

    What if a kid whose parents doesn’t own a car (or have insurance) drives someone elses car and gets into an accident?

    It depends. If the owner has insurance and the child who is not a “Family member” has reasonable belief that the named insured would allow the insured to drive it (for example, a nephew who is in for the weekend), then they would be covered under the auto. However, if there is no “reasonable belief” (for example, a frat buddy (or yeshiva bochur) “borrowing” the auto of a student who is insured under his/her parents’ policy), then they could be denied coverage. They may still be covered for liability up to the state’s FR limits (depending on the state and court. See Progressive Northern Insurance Company v. Concord General Mutual Insurance Company as an example of the complexity). I do not know if they could be arrested for driving without insurance, but I doubt it.

    (once again, this is not a legal opinion).

    #998493

    sthuey49
    Member

    My daughter was ill all of last year and I was able to have her removed from the policy. But I have since changed over to GEICO, and they want her on my policy , she is still ill and is not driving… Lets hope common sense prevails and one of the largest insurance company’s is not going to try and pick my pocket.

    edited

    #998494

    yose
    Member

    sthuey49, why’d you change carriers? Try going back to your first insurance carrier.

    #998495

    kollel_wife
    Participant

    I will say that I added two drivers (my children) to my insurance and my rates did go up but after a while they went down again.

    Hopefully if they don’t have any accidents you’ll see this happen too.

    #998496

    oomis
    Participant

    If your child is not driving, they have no right to add her to the insurance. YOU have th obligation to notify the insurance Co. if you have another licensed driver, but it is not automatic that they MUST add the driver to your policy. Suppose she had her OWN policy? In your case, she is not driving at all. They have to be concerned ONLY with the actual drivers in your family.

    I have such a situation in my household. The insurance company is aware that there are five LICENSED drivers in my house, but only four of them drive. We are NOT charged for the fifth. If she would drive and have an accident, they would have the right to refuse to pay, but they do not charge if she is not on my policy.

    #998497

    akuperma
    Participant

    You are required to tell them if any children who are living at home have a drivers license. If you don’t and you have an accident, they might be able to cancel your policy retroactively since you were committing insurance fraud.

    If the child is truely an adult, you don’t need to tell them if the child is not claimed as a dependent on your taxes and doesn’t live at home. Also, they don’t charge if the child is at a dorm at a considerable distance (for a New Yorker, I believe Chicago is far enough away).

    If the child doesn’t need a license to commute to work or school, why did you let him get a license?

    A clever trick I discovered is for the child to get the license immediately before leaving for Israel. That’s far enough away that it doesn’t affect rate, and when they come back they have the status of a new driver who has been driving for a year (or more) without an accident — even though they haven’t driven since they left home for yeshiva.

    #998498

    day by day
    Member

    If its a leased car, does it work the same way as adding a new driver ?

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