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bucketmouth64

car insurance coverage for family

20 posts in this topic

It is amazing how many families don't have children or spouses covered under there insurance policies. One of the requirements at my job when I hire an independent contracter is that they have to prove they have car insurance in their name or proof that they are a covered driver under a policy. Many don't have spouse or kids listed as covered drivers. When I tell them to contact their insurance agent to check their policy because they need to have all covered drivers listed. Well, when I hear back from them they can't take the job because that means their premiums will go up. Isn't this considered driving without insurance? What happens if you get into an accident and the insurance company doesn't have you listed as a covered driver? Can they deny the claim? Same goes for boyfriend/girlfriend using the same car, but not listing the other on the policy. I do believe that all insurance companies ask for all driver names who could be using your vehicle in the household. Is this practice common and people being dishonest? What are your thoughts?

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From what I understand, and I'm not an insurance expert, it's the car that insured and not the driver. Yes, you are supposed to notify the ins company of all the drivers in your family but I don't think they can deny a claim because an unlisted driver was driving the car.

I can only assume that if you have a teenaged kid driving, not listed on your policy, and gets into a fender bender your premium will go through the roof.

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I work for an insurance company based in Minnesota. We can and do deny claims if an unlisted driver is driving the car. At the time of application we require the named insured to list all household residents and regular operators of the car. If you do not list a spouse and they get in an accident in the car we are fully within our rights to deny the claim becuase it is stated plain as day on the application that they are required to list all drivers.

I am not in the claims department so i do not know all of the finer points of the process but I do believe if someone who would not be considered a regular operator (a friend you loaned the car to) would still be covered becuase it was a one time thing however you would not get the coverage you paid for. You would only get coverage up to the federally mandated minimums.

With all that said my company is more of a player in the non standard market and although most insurance policies are pretty standard and are all based off the same template variations mighte exist between each carrier on this issue so don't take this to be 100% accurate for your personal policies.

So in short to answer one of your original questions, if a spouse is not listed on the policy and is driving the car I do belive that should be considered driving without insurance.

This is partly the reason why insurance rates are so high. Everyone is required to have insurance for Uninsured and Under Insured motorists, basically we are paying for others lack of responsibility. And then theres also the No Fault laws in MN and some other states the are riddled with fraud that rasie rates.

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Thanks for the info nofisherman. The applicants who have to turn down the job all say their spouse, or parents, don't want to pay the extra money. And yet they let them drive anyway knowing full well what they are doing.

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Thats exactly why we are able to deny claims, they know what they are doing and they know its wrong. We deny the claims based on material misrepresentation, basically they lie on the insurance application.

Its funny how its easy to think insurance companies are evil until you work for one and you learn what really goes on and find out why things work they way they do.

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If the student driver watches a video and turns in their report card, they can get a lower rated from at least one insurance company. It at least encourages compliance.

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I live with my girlfriend and we both have our own cars and insurance, it's none of their business who I live with or what my credit score is to determine my insurance rate. They should rate you by the vehicle replacement value, driving record and years driving. Oh yea, I also used to work for an insurance company and have friends that are in the claims / fraud and as sad as it is there are those who like to cheat the insurance but the number of good drivers out ways the number of bad and it sucks that we the good ones have to suffer for it the most.

As far as your question goes, if it's a company vehicle then only the person who works for the company should be driving that vehicle (regardless who he/she lives with) and the employer / employee employment agreement should state that only the employee is allowed to operate the vehicle, anyone else driving will result in immediate termination. It should also state that if anyone else is driving and gets in an accident that the employer will sue for damages and compensation.

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The more factors companies can use to determine rate the better your rate can be. Carriers can be much more accurate when they figure out who they need to charge a higher rate. That also allows them to figure out better who is a lower risk and reward them accordingly with a lower rate.

If they used fewer factors the overall rate would be higher since there would be alot more error in assigning risk to a driver, that means rates go up in order to cover the margin of error.

If you have good credit you should be happy they are using it since you are saving money becuase of it.

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I think replacement value, driving record and years driving is plenty info to rate someone. Where does someone's credit score fall into their driving ability? I know that here in Central NY the first thing they look at is your credit score which just baffles the [PoorWordUsage] out of me.

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Every company in the country uses credit score. And they are only using it beucase they have been able to prove that credit score does help indicate risk. They wouldn't use it if there was no correlation.

I am not sure what you did when you worked for an insurance company but setting rates is alot more complicated then just those few factors you mentioned.

Each insurance company has very smart people that are basically locked in a room trying to figure out how to give people the lowest rate possible while still trying to make sure they earn enough to cover loss ratios and still make a profit. After all this is a busines not a non-profit charity.

There is so much competition now days that carriers truly are trying to offer you the lowest rate possible. If you would rather have them set rates based on the very limited info you mentioned then you better be prepared to pay alot more for your insruance. They only people that will get a break from that strategy are the highest risk drivers since all the info collected helps throw up red flags when they apply for insurance.

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It's the same thing here and especially for renters insurance. When I had an apartment I couldn't get renters insurance because my credit was too low, when I inquired I was told well people with credit below 650 tend to set fires more often and file false claims...I was like what...so I said screw it and bought a house....

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Its just the insurance companies trying to protect themselves and their customers. If they either deny someone in a high risk category or atleast charge them more money they are protecting their profits as well as the rates of the lower risk people. All they are trying to do is charge the people who are at fault and not pass the expense of the claims onto the other customers.

And really it doesn't matter what state you are in. Rates are pretty much set the same way everywhere.

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Yeah I understand that and I understand the liability issue but to not even offer it at a higher premium, for my apt, but then go out and get a $100K - whatever it may be mortgage and insurance no problem, just blew my mind....

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I am sure the underwriting criteria for renters insurance is pretty tight since I don't believe it is very profitable generally. When I had renters insurance it was only $100 or so for a year but if you have one fire you will probably have a claim for tens of thousands. It takes alot of renters insurance premium to cover just one claim.

Also renters insurance is not required so they can restrict it easier.

Now homeowners insurance is required so odds are they won't deny you when you apply for it, they will just calculate the risk into your rate. I am sure you are paying more for your homeowners insurance then you would be if your credit score was higher.

Its a very complex business and since there is no tangible benefit that a customer can see the isurance business gets a bad wrap alot of times.

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So...if I am diagnosed with cancer and can't work for 2 years and have to file bankruptcy and my credit is shot, but 4 years later I'm free of cancer, will the insurance company give me some slack. If you belive that I have a bridge to sell you. THIS IS THE FLAW WITH THE STUPID CREDIT RATING SYSTEM.

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So...if I am diagnosed with cancer and can't work for 2 years and have to file bankruptcy and my credit is shot

Thats why everyone should purchase long term disability insurance.

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Please keep in mind that the same system they are using today to rate everyone is the same systems 20 years ago. To say someone is a higher risk because of their credit score is a bunch of bull, and as far as enough info what else do they need to know to show my ability to be a safe driver (I'm not asking for a huge loan). As stated in the first sentence, the systems is old and flawed. It needs to be redone, it's old school guys running the same old school rules.

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Credit rating doesn't indicate how safe you are but it does indicate how responsible you are and thats what insurers are looking for. Someone with a creidt score of 750-800 looks alot more responsible then someone with a score of 400.

Assuming you don't know the people who would you trust more, someone who has a high credit score and proven they are financial responsible or someone who has a low credit score likely becuase of late payments and high debt rations. Which of them would you trust more when a couple thousand dollars of your money are at stake?

The system for calculating rates is always becoming more indepth and more accurate and whether you like it or even admit to it that is a good thing.

If you want insurers to calculate rate based on only vehicle replacement value, driving record and years driving you will lose your discounts you get for being married and being a homeowner since those are also indicators of responsibility. People in rural areas will see a rate increase becasue now city drivers and country drivers are rated the same despite city drivers being in many more accidents. I know you don't want to believe it but the system that you claim is old and broken is actually designed to save responsible people money.

If you are not a responsible person based on insurance companies ratings then by all means complain but your rates are high becuase of what your choices. If you are responsible then all of these things you are complaining about are designed to help you so I am not sure what your issue is.

To answer another question, if you get cancer and go into bankruptcy and your credit score tanks then it will probably only affect you if you change insurance companies. I do not think its standard practice to pull credit scores for people at renewal. That usually only happens at the time you first request the policy. So if that is the case just stick with your current company and your rates will stay that same, or if they change it won't be becuase of your credit. But like was stated before, long term disability is a must have, any financial advisor will tell you that during your first meeting. I think the stats are that something like 1 out of 3 will need long term disability at some point so if your company doesn't offer it I would go find it somewhere else.

An additional piece from Progressive on why they order credit reports.

"We order your credit report and use information from it to calculate your insurance score — this score is used when determining your car insurance rate. We use credit because numerous studies have shown that credit is a very powerful and independent predictor of the likelihood of future accidents or insurance claims. In fact, Progressive data shows that consumers with the worst insurance scores are twice as likely to have an accident or insurance claim as those with the best scores"

(Progressive is one of the industry leaders when it comes to rating structure. Many companies follow suit when Progressive decides to add a rating factor like credit score.)

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The main reason insurance companies use credit scores is that people with higher credit have a tendency to handle smaller claims themselves, tend to take precautionary measures such as parking their car in the garage with an approaching storm, shutting off the water while on an extended vacation, pay their premiums on time, etc... Believe me, there are many many exceptions but based on millions of people there is a correlation between claims paid by low credit scores versus high credit scores for individual policy holders.

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In MN the liability coverage follows the car, as long as the driver has permission.

In MN the PIP (medical) coverage follows the individual, regardless of the vehicle. If the driver is not not listed on a policy, and the person the individual lives with has a policy, the household policy will pay regardless who is at fault. If the individual lives alone, or if there is not an active automobile policy in the household, and the driven vehicle has an active MN policy, the vehicle policy will cover the PIP.

Whew!

Youthful drivers pay a higher premium because the risk is much higher.

Insurance based credit scores are suppposed to be different than financial credit scores, and are supposed to determine the amount of risk. This topic has been debated in congress.

I have been a captive agent for a major insurance carrier for 5+ years, which is not a long time, but long enough to understand the basics. I enjoy my work, and every one of my customers learn about this before coverage is started.

I had better get back to work, there have been a lot of claims recently.

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