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O/T Any auto insurance experts on here?

Discussion in 'Uncategorized Threads' started by new loader, Sep 11, 2007.

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  1. new loader

    new loader Member

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    Here's the problem: I have 3 vehicles in this family, and a new teen driver. They say 3 cars with 3 drivers mean someone has to be designated a primary driver on each. They put my son as primary on oldest vehicle, but it still has a sky high rate. Since when did this become common practice? All of us drive all the vehicles occasionally, so why can't I keep him listed as secondary on all? This insurance is crazy. How can I get around this? If I had only 2 vehicles with 3 drivers, it would not be an issue.
     
  2. Fast Oil

    Fast Oil TS Member

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    Now think this through and read your own post.

    Each vehicle must have one primary driver and each driver can only be a primary driver one time. 3 vehicles and 3 people = each person is a primary driver for one vehicle each.

    I think your agent did you a favor by putting the teen on the oldest vehicle.

    You can't get around it, then everyone would do it and the Insurance co. is in the business to make a profit if a person bought a car for their teen then had them listed as a secondary driver would that not be insurance fraud.

    Guy in shop on sunday and conversation turned to his 16 year old son now driving and he said the insurance to add him to the policy was $2200 per year. How does that compair?

    Just trying to make you think this out, know you must be going through sticker shock.
     
  3. BIGDON

    BIGDON Well-Known Member

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    1. Try seeing if your agent can exclude him from 2 cars. This means he cannot drive them period no exceptions.
    2. Take older car and son and buy him his own policy and exclude him off the other 2.
    3. Shop around for a comapany that is not so hard on youthful drivers, they do exsist.
    3. Devorce wife and make son with his mother. (kidding)

    Don
     
  4. spitter

    spitter Well-Known Member TS Supporters

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    As was said, be thankful your agent put the kid on the older vehicle - typical underwriting "policy" was you put the youthful driver on the most expensive car because that had the greatest exposure.

    Otherwise, the only option for "you" - is to put a car in the kid's name and get one of those substandard outfits to insure him individually getting him off your insurance record entirely. Whether that actually saves anything I couldn't tell you, but it is an option to explore.

    Jay Spitz
     
  5. PhillyD

    PhillyD Member

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    I have the same problem. I have 5 cars and had to declare my daughter as the principal driver on one. It was the the oldest car but she is covered on all the cars she drives of mine. Girls are cheaper to insure than boys, but its still expensive.I paid more for my son when he was a teenager than I do now for my daughter. New Loader I guess you just have to bite the bullit and pay the price. Make a claim and watch that rate skyrocket.The insurance motto
    "pay us, and shame on you if you want us to pay a claim" They are CANCEL HAPPY
    when you make a claim.........Philly D
     
  6. superxjeff

    superxjeff Active Member

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    John. telling son that he is walking is easier said then done in most states. Unless he turns in his license or the company is willing to exclude him. Lot's of companys won't exclude. Jeff
     
  7. spitter

    spitter Well-Known Member TS Supporters

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    John's recommendations to remove the comp & collision can make sense also, unless the oldest vehicle still is new and nice enough to need to maintain the coverages.

    Not an easy situation and one thankfully, I don't have to deal with any longer, but explore every possible option.

    Jay
     
  8. cmptrwz1

    cmptrwz1 TS Member

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    Try this if your son is a new driver and he has just turned sixteen and just gotten his license and he doesn't own the car. He can't be the primary driver on any of the cars unless he owns them. He has to be second because he can't own or sign a contract until he is 18. If the car is not registered or titled to him, he can't be the primary driver. Also, if he is sixteen there are restrictions on his license that he can't drive after 9:00pm so that makes him a part-time driver in any car you own and the agent is running the game on you.
     
  9. InsureGuy

    InsureGuy Member

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    New Loader


    Most of the information that you have heard is correct. You must put your son on one of vehicles as a primary driver. If the company is allowing you to use the oldest, they are doing you a favor. You stated in your 1st post that each of you occasionally drives other cars. The insurance company is not collecting the premium for the risk that they are taking on the newer, nicer vehicles with a higher replacement cost.


    2nd, The advice about taking comprehensive and collision off the vehicle is right on. That account for roughly 2/3 of the entire costs of the policy itself. If you insure a car for liability only, it doesn't matter what the car is. It can be a Porche, Ferrari, or a pinto. The price will be the same because the insurance company is just covering the liability for the other person and that exposure is the same no matter what car is being driven.


    3rd The loss ratio (somewhat dated) for individual primary operators under the age of 21 is 210%. For every dollar taken in, $2.10 is paid out in claims. For adult mature drivers the loss ratio (again, dated) was about 62%. Kids statistically are the biggest danger on the road. Teen driving is the Number 1 cause of death for children between the ages of 14 through 25.


    I say this with all the candor I can muster. 2 weeks ago a 16 year customer of mine was involved in a 2 car collision that killed he and the other driver. Details are still sketchy as to what happened. The grief that the family is going through I can only guess at. Either way the insurance company will payout the max benefit, and I can assure you, they didn't collect that amount.


    You wrote "this insurance is crazy" & "is there any way around this" If you feel that the insurance comapny is crazy, simply cancel the policy and take that risk on yourself. That's it's. take the money and stick it in your pocket. When you or your son has an accident, and the other party has a neck or back injury, I hope your pockets contain all that's neccessary to pay that bill. Otherwise, work with your agent to see what can be done to lower the premiums.


    Jason
     
  10. InsureGuy

    InsureGuy Member

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    cmptrwz1

    You have no idea what you are talking about. part time operator ?? cannot be owner ?? Perhaps you need to move out of your parents home and live the "big boy" life.....


    Jason
     
  11. cmptrwz1

    cmptrwz1 TS Member

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    Insureguy I can see you must be an agent because of your BS that some people know little more then what you want the poor folks to know so you can beat them out of there money and make them think that GOD has spoken.It's poeple like you that make this world a worse place to live in and get rip off by you.
     
  12. whiz white

    whiz white Strong Supporter of Trapshooting Banned

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    I have the same problem: 5 vehicles, 4 drivers, one a son in college 1,000 miles away and a daughter in law school, 800 miles away. A Suburban that sits in the garage and is rarely driven (maybe 1500 mile a year).

    Here's what I did, because it seems like I was writing checks daily to the insurance company. In all my vehicles, I figure if I can't write a check to replace it, then it needs to have full coverage.

    I have decided that all 5 vehicles will only be covered with liability, a bit higher than state minimums. If one get wrecked, then I have to step to the plate and replace it. Living is SD, of course, is different than living in CA for incidents of accidents.

    First comment: In 1998 I bought my wife a new Aurora. She hit a curb at 20mph, that pulled the car further to the right where a telephone pole was sitting 8" from the curb. It totaled the car, as the support guy-wire sheared the bolts on the front crash bar and shoved the motor back - a mess. The insurance company completely covered the car. We have two Auroras now.

    Second comment: A couple of summers ago a freak accident in my shop, in the garage part, filled with some water and two of my Perazzis were ruined. The insurance company who I had them scheduled with (same company) asked me what I thought I should get for them. They gave me every penny and let me keep the guns.

    Even though I spend a lot of money with the company, I will never pay enough in premiums to cover what they have paid out to me in losses.

    IMHO.

    Whiz
     
  13. new loader

    new loader Member

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    Thanks guys for all the comments and advice. How about this idea: The wife has her own business. Can I take 1 vehicle and make it a company car, and then we are back to 3 drivers for 2 vehicles? What are the pros/cons to this idea?
     
  14. cdconley

    cdconley TS Member

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    New Loader,

    First let me tell you that some of the advice you’re getting should be totally ignored. Next I’ll tell you that each company “files” their policies with the State and can’t deviate from that filing. With that said I can assure you that you’re with a favorable company for teenage drivers without even knowing what company your with. The reason I say that is that there are companies who have filings that allow rating your young driver on the highest rated vehicle (progressive is the worst) no matter how many cheep vehicles you have.

    Now lets clear up some terms.

    Primary driver is the person that is most likely to drives that vehicle on a regular basis.

    Secondary driver is any other driver that has access to that vehicle.

    Rated driver, (term you missed) is the driver that is rated on the vehicle and doesn’t always mean the primary driver.


    Now let’s go back to an example that you talked about. Let’s just say that your household has 2 cars and 3 drivers. Let’s say that you and your wife are listed as “primary drivers” on each and your son is listed as a secondary driver. Assuming that these are two newer vehicles in this example you might be paying more for the two cars then you are for the three cars. This is why, no matter what you do or say POINTS and SURCHARGES will be charged. So with two vehicles the youthful driver charge will be added to one of the more expensive cars. By not having the old beater to “rate” those surcharges those charges would be added to one of your more expensive cars. The best advise I could give to someone with a teenager is to buy an old clunker so that you have someplace to put those points without those points applying to the expensive physical damage that you carry on a newer more valuable vehicle.

    Example broken down.

    Veh #1 stand pref. Value 30K
    Veh #2 high pref. Value 40k
    Dirver 1 52
    Driver 2 48
    Driver 3 16

    Veh #1 = prim driver #1 second driver #3 Rated Driver is #3
    Veh #2 = Prim driver #2 Rated driver #2

    Now add a third veh
    Major advantage now is that you have the rated driver on #3 as driver #3. This will significantly reduce the rate on the more expensive vehicle #1 possible outweighing the charges for veh. #3.


    Now as for the suggestions that you move the kid to his own policy. This is the worst thing you could possibly do. Typically when this is done and someone tells you they saved money doing so, they are dead wrong. All they are doing is buying less coverage. I’ve seen a lot of agents sell insurance in this way giving a quote on state min limits of liability. The problem is when you do this you’re only taking the exposure away from you insurance company not yourself. So instead of having 250K for that accident you might find that you know only have 15k for an accident that you’re responsible for (no matter how the vehicle is titled) and are due to lose your ass-ets.

    The reality of buying a separate policy.

    1. Company is a high risk company if they are writing a young driver on his own, meaning the rate are much higher then your preferred policy assuming the same limits.

    2. The High risk company is also not going to be giving you a multi auto discount for that one car, again raising your cost per $ of coverage.

    3. Your also not going to be getting an auto/home discount.


    Make sure you check for all discounts that can be applied. (good student normally over 3.0 or top 20% in class rankings) Make sure that if your son is not commuting to and from school or work your agent has veh#3 rated a pleasure.

    Good luck.
     
  15. Jeff P

    Jeff P Well-Known Member

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    Wow.

    When I turned 16 I had the "privilege" of not only buying my own car but also buying my own insurance policy. That meant I had to get a job, obviously.

    Dad was ok with that...but told me that the first report card that showed up that wasn't honor roll grades, I could just give him the keys to the truck I bought and call into work and tell them I wasn't coming.

    Much like John Malcom, I guess I listened. I did six straight semesters of honor roll work in HS and carried a 3.4 through a chemistry major in college. We came home from graduation, and dad asked me when (not IF) I was moving out.

    I'm 42 now...seems to me that kids today don't appreciate anything what with mommy and daddy buying everything for them without any effort on their part. Cell phones, gas, insurance, rent, clothes - and this is well into their mid-twenties. I once dated a gal who was 27 who was SO PROUD she was making it on her own with "only" $500 a month from mom and dad.

    WHERE WERE ALL YOU SOFTIES WHEN I WAS 16? You could have adopted me....
     
  16. spitter

    spitter Well-Known Member TS Supporters

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    You love your kids, but kids are kids. Insurance companies are in the business of transferring risk. Put a car 100% in the name of your kid, better yet, sell the car to your kid and its your kid's car. Of course, anyone can sue anyone, but if my kid was driving today, he'd be off my policy + plus I carry excess liability anyway.

    Regarding having the kids pay for insurance - absolutely + gas - then watch how many trips to the mall they take! As a loving parent its OK to subsidize expenses, based upon your circumstances.

    Now regarding the business angle - that could be a possibility. Although having a business vehicle + others may impact certain tax deductions, but provide for others. I would have to expect that business car insurance may be more expensive, but look at the big picture and the bottomlines.

    Lastly, there are a few closed minds on the subjects discussed, so keep an open mind to any possible option. Bottomline, its your problem and only you can find the solution - again, ask everyone and anyone.

    Wishing you good luck on this financial challenge.

    Jay Spitz
     
  17. timb99

    timb99 Well-Known Member

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    Not sure if this has been stated above, but if you have a loan out on a car, I don't think you can drop comprehensive & collision. I think the lender typically requires this, and is the named insured on the policy.
     
  18. Opion8ted

    Opion8ted TS Member

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    Shop insurance companies. The world is full of them.
     
  19. cdconley

    cdconley TS Member

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    Ok all you want to be experts on insurance.

    I'll try and explain this one more time.

    There is absolutely NO advantage to getting your son or daughter their own policy. IT DOES NOT MATTER ONE BIT HOW YOU REGISTAR THE CAR. You are responsible for the actions of your minor child.

    Some simple insurance rules to keep in mind to help you "expert advice givers" understand this.

    1. Your youthful driver can only be rated on one vehicle. The rating on the other vehicles on the policy are not affected.

    2. Whether your son/daughter is driving your car, his car or his buddy’s car you are responsible if he is a minor for any damage that he does. Excluding him from your policy only lifts the exposure from your insurance company NOT FROM YOU!

    3. No matter where you insure "his" car you're going to be charged for his age, sex and driving record. Going it alone he will be going to a "high risk" (high rate) company. He will be giving up discounts like multi car and auto home.

    So in the case listed above moving the kid and auto to his own policy will not affect the rate for the first two cars, but on car three you'll be paying WAY more money with no benefit and you could end up losing everything you own because you listened to someone that gave you horrible advice.


    But let me give you an extreme example that was given in a CIC update class I was in a few years ago.

    19 (not a minor) yr old, not a full time student and not living at home. The vehicle he was driving was given and titled to him at the time that he moved out of the house. Although he was out of the house, not a full time student and owned and insured the vehicle, he still as a favor to his parents picked up his younger siblings from school on a daily bases. Well he ended up in an accident involving serious bodily injury. The company that he was with gladly paid out policy limits (state minimums) to the multiple victims. The next thing that happened was the parents of this young man were named in a lawsuit. No worries here, so everyone would think. Well the first thing that happened was that Dad had to go hire an attorney to answer the suit (big bucks) and his insurance company had no obligation to defend because the kid had been excluded a few month earlier and the car was taken off the policy. The lawyer (big bucks guy) told his client that there was nothing to worry about because he could see no liability link. HE WAS WRONG. The case went to litigation and based on a couple facts the parents or household was found to be liable. The facts were, 1. The kid was picking his siblings up on a regular bases so the judge found that the vehicle and driver involved did “regular household business”. 2. The judge ruled that the vehicle although owned by the driver was originally provide by the parents.

    This was an insurance horror story involving an adult living outside the home. Do you really think that “selling you minor child a car” when he lives in the home will protect you in anyway from a lawsuit. HELL NO.

    Get sound advise from a professional and for financial sake don’t listen to the guys that have no idea what they’re talking about.

    Carl D. Conley, CIC, CRM
    ATP & Associates
     
  20. cdconley

    cdconley TS Member

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    Don,

    I sure hope that you have good e&o coverage. I sincerely hope that you never have a client come into your office telling you that they did as you suggested and placed their teenager on his own policy and that he has just totaled a mini van driven by a soccer mom that was taking her two children along with 3 other kids to a game and two were killed and the rest are in critical condition. Then they tell you that the policy they placed with Dairyland (on your suggestion) had limits of 15/30/10 and Dairyland informed them that they were paying the policy limits. And I hope that the lawyer that your client hires to defend them in the law suit that will most positively be brought isn’t smart enough to know that they can go after you for giving them poor professional advise. This is the reality of the litigious world we live in. Don’t worry about the little accident Jr has in the Walmart parking lot. But give that advice prior to a major BI loss and you’ll understand why it was the worst advise you possibly could have given.
     
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