Auto Insurance for college students (lawyers, game, parents, children)

[cc0789]

Originally Posted by Momma_bear

Update: My husband called Progressive this afternoon. They advised him to remove our son from the policy if he is going to be out of state and not driving our cars. They said that if he returns for short periods he can drive our cars and it would be the same as if we lent our car to someone. They said that we should add him back to the policy when he returns for the summer. They also told us that if he drives somebody's car it is the registered owner's responsibility to provide insurance.

I would get that in writing, email or something at least (and be careful with words such as "should" or "under certain circumstances"). There are many legal judgements that have ruled otherwise, if the student is under a certain age, and a complete dependent. You won't know until he causes an accident and you are sued for medical bills and loss of wages, then see if the insurance company lawyers care what that customer service rep said when the contract states otherwise. He better not be receiving any mail or have any belongings at your home, as I do recall that being used against a policy holder in one of the lawsuits.

[Momma_bear]

Originally Posted by Hedgehog_Mom

To take him off of your policy, you probably have to list him as an excluded driver, meaning that he would definitely not be covered if he was home for a short period and drove your car...you need to ask if he'll be considered an excluded driver.

My husband spoke with the person from Progressive who told him that as long as my son was home a short time he could drive our cars and would be covered the same way as if we had lent the car to a neighbor. When he is home for an extended period of time we have to add him to our policy.

Originally Posted by Hedgehog_Mom

Personally, I quit using Progressive years ago because they were worse than useless when my husband was hit by another Progressive customer...we ended up having to hire an attorney to get it all sorted out. I switched to USAA and our rates were half what they were with Progressive.

We do not qualify for USAA. We have no military ties. My husband's partner is retired AF and he loves USAA.

[cc0789]

Originally Posted by Momma_bear

My husband spoke with the person from Progressive who told him that as long as my son was home a short time he could drive our cars and would be covered the same way as if we had lent the car to a neighbor. When he is home for an extended period of time we have to add him to our policy.

a neighbor is not a complete dependent for which you take a tax deduction and receives mail at your home.... I would be very careful with taking advice from "the person from Progressive", as they are often recently licensed and clueless. I'm assuming you are talking with the 800 number, as opposed to a trusted independent agent (which would quickly provide you with written confirmation, and even if wrong, you would be covered under their errors and ommissions policy of at least 1million). Incompetence is common among the mass employees, I can assure you their attorneys will be very competent.
I'm not familiar with progressive contracts, but I am familiar with many other policy contracts that would not cover him. Common sense would tell me, if they are offering an "away at college" discount (which all dictate that he be out of state or certain miles away from home and not take any car with him) to every other policy holder.... why would they offer to cover him, under the same exact circumstances, for free??

Even if you do get this in writing, make sure he doesn't drive other people's cars while at school. Even thought he would be covered by their insurance, they could be carrying state minimums of 15k, and if he causes injuries of $180k, as a dependent of yours, they will be coming after you.

[Momma_bear]

Originally Posted by cc0789

Even if you do get this in writing, make sure he doesn't drive other people's cars while at school. Even thought he would be covered by their insurance, they could be carrying state minimums of 15k, and if he causes injuries of $180k, as a dependent of yours, they will be coming after you.

Our son is an adult. We are not responsible for the actions of an adult driving somebody else's car.

[lkb0714]

Originally Posted by Momma_bear

Our son is an adult. We are not responsible for the actions of an adult driving somebody else's car.

While I agree in sentiment, if you are still claiming him as a dependent on your taxes, and his legal residence is your home, than they can try to come after you. They may not succeed.

Also, I am surprised they would let you remove him off your policy completely. Here, and I did not know it was a state by state law, a parent cannot remove a child whose legal residence is the same as theirs until they have their own insurance. Interesting.

[Ringo1]

I would say that does very by state. We have no legal requirement to insure another adult - dependent or no.

[Momma_bear]

Originally Posted by lkb0714

While I agree in sentiment, if you are still claiming him as a dependent on your taxes, and his legal residence is your home, than they can try to come after you. They may not succeed.

Simply claiming him as a dependent on our tax return does not make us responsible for his actions. He is an adult.

Originally Posted by lkb0714

Also, I am surprised they would let you remove him off your policy completely. Here, and I did not know it was a state by state law, a parent cannot remove a child whose legal residence is the same as theirs until they have their own insurance. Interesting.

I am surprised also.

[Finger Laker]

In some cases they can still claim that you are financially responsible for him for certain aspects .... when it comes to laws & insurance the defendents are very good at finding a pocket that will pay and the courts are generally supportive .... if there is collectible insurance somewhere they will grab it and if there should be but isn't they will be aggressive

so much of this will vary by state though as insurance is regulated at the state level

also, it's very important to go to progressive.com and pull a copy of your policy contract - it will lay out what you agree to do under the policy

I have progressive - although in a different state - here is some information from my policy that could be relevant

"Relative"

Relative means a person residing in the same household as you, and related to you by blood, marriage, or adoption, andincludes a ward, stepchild, or foster child. Your unmarried dependent children temporarily away from home will qualify as a relative if they intend to continue to reside in your household.

Here is the liability insuring agreement

[CENTER][CENTER]PART I - LIABILITY TO OTHERS[/CENTER][/CENTER]
INSURING AGREEMENT
If you pay the premium for this coverage, we will pay damages for bodily injury and property damage for which an insured person becomes legally responsible because of an accident.
Damages include prejudgment interest awarded against an insured person.
We will settle or defend, at our option, any claim for damages covered by this Part I.

Pretty standard stuff in all insurance - the company agrees to pay damages that are covered under the policy that the insured party is legally obligated to pay ........ the tricky part and where the courts get involved is "what is legally obligated to the individual policyholder?"

also remember - that liability does not equal coverage ........ just because you are legally obligated to pay for something, it doesn't mean that your contract will cover it .... best example would be intentional acts - any intentional damage to a 3rd party is usually excluded from an insurance contract when you get sued by that 3rd party .... doesn't mean you are not obligated to that 3rd party, but your coverage will exclude such acts and you will be on your own

So who is an insured for liability?

When used in this Part I:
“Insured person” means:
a. you or a relative with respect to an accident arising out of the ownership, maintenance, or use of an auto or trailer;
b. any person with respect to an accident arising out of that person’s use of a covered auto with the permission of you or a relative;
c. any person or organization with respect only to vicarious liability for the acts or omissions of a person described in a or b above; and
d. any Additional Interest shown on the declarations page with respect only to its liability for the acts or omissions of a person described in a or b above.

two new defined terms in here

auto

[SIZE=3]. “[/SIZE]Auto” means a land motor vehicle:
a. of the private passenger, pickup body, or cargo van type;
b. designed for operation principally upon public roads;
c. with at least four wheels; and
d. with a gross vehicle weight rating of 12,000 pounds or less, according to the manufacturer’s specifications.
However, “auto” does not include step-vans, parcel delivery vans, or cargo cutaway vans or other vans with cabs separate from the cargo area.

covered auto

[SIZE=3]. “[/SIZE]Covered auto” means:
a. any auto or trailer shown on the declarations page for the coverages applicable to that auto or trailer;
b. any additional auto;
c. any replacement auto; or
d. a trailer owned by you.

This is a pretty broad for who is an insured- the covered auto is what is on my dec page, it's what I tell them I drive and it's in part b of who is an insured .... if a person is a permissive user either by me or my relative they are covered in my auto - any person

Part a is interesting is that it doesn't mention just the autos on my dec page - it's broader - it's any car or truck that is under 12,000 GVW and part a states that if I or a relative use such a vehicle and it's in an accident then my policy will respond to my liability



The liability exclusions are pretty much:

1. bi/pd arising out of using your vehicle while carrying a person/property for a fee
2. any liability assumed in a contract by your or a relative
3. bi/pd arising out of employment (which should be covered by WC)
4. bi/pd to a fellow employee (again WC)
5. auto business - a bit more complicated and not really relevant here
6. racing/demolition contests
7. nuclear exclusion
8. intentional acts
9. property damage for property in your care, custody & control
10. bodily injury to you or a relative (in AZ policy only covers up to minimum required legal limits - the liability policy is meant to be 3rd party)
11. punitive damages
12. criminal acts

Also these exclusions:

bodily injury or property damage arising out of the ownership, maintenance, or use of any vehicle owned by you or furnished or available for your regular use, other than a covered auto for which this coverage has been purchased;

basically if you own a vehicle or have a vehicle available for your regular use you need to list it as a covered auto and pay your premium ot get coverage

bodily injury or property damage arising out of the ownership, maintenance, or use of any vehicle owned by a relative or furnished or available for the regular use of a relative, other than a covered auto for which this coverage has been purchased. This exclusion does not apply to your maintenance or use of such vehicle;

if your relative has a vehicle or has regular use of a vehicle there will be no coverage under this policy for that vehicle - unless you are liable for damages due to your maintenance of the vehicle

bodily injury or property damage arising out of your or a relative’s use of a vehicle, other than a covered auto, without the permission of the owner of the vehicle or the person in lawful possession of the vehicle;

if you or a relative use another vehicle this policy will not respond unless you had permission - if you had permission then usually their policy should respond first - if not then you could be in an uninsured situation excluded by both the policy of the auto owner and your individual policy

. bodily injury or property damage arising out of the use of a covered auto while leased or rented to others or given in exchange for any compensation. This exclusion does not apply to the operation of a covered auto by you or a relative;

your not a rental business - don't act like one

FINANCIAL RESPONSIBILITY LAWS
When we certify this policy as proof of financial responsibility, this policy will comply with the law to the extent required. The insured person must reimburse us if we make a payment that we would not have made if this policy was not certified as proof of financial responsibility.

if the policy is being used as proof of financial responsiblity (which it is) and you carry less than what is mandated in the jurisdiction where you have your loss the insurance company can come after you for the difference ....... for example, if you carry $100k insurance and cause $150k in liability in a state that requires a $150k minimum then the insurance company will be legally obligated to pay that extra $50k - which they will then come after you for

OTHER INSURANCE
If there is any other applicable liability insurance or bond, we will pay only our share of the damages. Our share is the proportion that our limit of liability bears to the total of all applicable limits. However, any insurance we provide for a vehicle or trailer, other than a covered auto, will be excess over any other collectible insurance, self-insurance, or bond.

this policy sits excess any other collectible insurance - this reinforces that your policy can be implicated in accidents for a vehicle that isn't owned by you

OUT-OF-STATE COVERAGE
If an accident to which this Part I applies occurs in any state, territory, or possession of the United States of America or any province or territory of Canada, other than the one in which a covered auto is principally garaged, and the state, province, territory, or possession has:
1. a financial responsibility or similar law requiring limits of liability for bodily injury or property damage higher than the limits shown on the declarations page, this policy will provide the higher limits; or
2. a compulsory insurance or similar law requiring a non-resident to maintain insurance whenever the non-resident uses an auto in that state, province, territory, or possession, this policy will provide the greater of:
a. the required minimum amounts and types of coverage; or
b. the limits of liability under this policy.

ties into the financial responsibility laws portion above

You'll have a similar format for every coverage that is on the policy (comp, collision, uninsured motorists, med pay, etc)



Then you'll have sections that apply to all policy parts - here are my duties in an accident

1. Must promptly report accidents to get coverage - even if not at fault
2. If not able to identify who caused the loss must report to police as soon as practicable
3. Cooperate with the insurance company
4. provide any written proof of loss they require
5. allow the company to take written & recorded statements
6. promptly notify the company about any legal correspondence
7. attend hearings/trials as required
8. mitigate losses
9. allow damaged property to be inspected
10. submit to medical examinations by doctors of the companies choice at their expense
11. authorize the company to obtain medical records

There are also general provisions that apply to all coverage parts

1. Policy Territory - US, Canada & their territories .... need to buy separate insurance if I drive to MX
2. Changes

Changes is important for this discussion so let me post the entire language

CHANGES
This policy contract, your insurance application, the declarations page, and all endorsements to this policy issued by us, contain all the agreements between you and us. Subject to the following, the terms of this policy may not be changed or waived except by an endorsement issued by us.

The contract is made upon the application and coverage is as shown and is the extent of coverage provided

The premium for this policy is based on information we received from you and other sources. You agree to cooperate with us in determining if this information is correct and complete, and to notify us if it changes during the policy period. If this information is incorrect, incomplete, or changes during the policy period, you agree that we may adjust your premium.

The company relies on your information and you have a duty to notify of changes if found to be incorrect they can adjust your premium

Here are some of the items that may result in a change

Changes that may result in a premium adjustment are contained in our rates and rules. These include, but are not limited to, you or a relative obtaining a driver’s license or operator’s permit, or changes in:
1. the number, type, or use classification of covered autos;
2. operators using covered autos;
3. an operator’s marital status;
4. the place of principal garaging of any covered auto;
5. coverage, deductibles, or limits of liability; or
6. rating territory or discount eligibility.

So they can start charging your policy the minute a relative gets their drivers license - remember a relative means "a person residing in the same household as you, and related to you by blood, marriage, or adoption, andincludes a ward, stepchild, or foster child. Your unmarried dependent children temporarily away from home will qualify as a relative if they intend to continue to reside in your household"

So you have a duty to notify of changes - but what changes?

DUTY TO REPORT CHANGES
You must promptly notify us when:
1. your mailing or residence address changes;27
2. the principal garaging address for a covered auto or a trailer shown on the declarations page changes;
3. there is a change with respect to the residents in your household or the persons who regularly operate a covered auto;
4. an operator’s marital status changes;
5. you or a relative obtain a driver’s license or operator’s permit; or
6. you acquire an additional or replacement vehicle.

So you must report when a relative gets a driver's license and you must disclose the residents in your household or if the persons who regularly operate a coverage auto changes

What if I don't tell them this information?

FRAUD OR MISREPRESENTATION

This policy was issued in reliance upon the information provided on your insurance application.

We may void this policy at any time, including after the occurrence of an accident or loss, if you:
1. made incorrect statements or representations to us with regard to any material fact or circumstance; or
2. fraudulently concealed or misrepresented any material fact or circumstance;
at the time of application or to obtain a renewal of this policy.

However, we will provide liability coverage under Part I - Liability To Others to the extent required by the financial responsibility law of the State of Arizona for an accident that occurs before this policy is declared void.

We may deny coverage for an accident or loss if you or a person seeking coverage has knowingly concealed or misrepresented any material fact or circumstance, or engaged in fraudulent conduct, in connection with the presentation or settlement of a claim.

However, this will not apply to:
1. any property interest of you or a relative that is impaired as the result of an act of domestic violence as defined by Arizona law, provided the person claiming the property interest:
a. cooperates in any investigation relating to the accident or loss; and
b. did not cooperate in, direct, or contribute or consent to the concealment, misrepresentation, or fraudulent conduct; and
2. liability coverage to the extent required by the financial responsibility law of the State of Arizona for bodily injury or property damage sustained by persons who did not participate in the concealment or misrepresentation of a material fact or circumstance, or fraudulent conduct.
We reserve all rights to indemnity for payments made and costs incurred by us against any person who has committed fraud or misrepresentation in connection with the presentation or settlement of a claim.

A couple things in there - if you misrepresent something that is material (and a resident driver would be considered as material in most courts) then they can cancel the policy. However, they may still be obligated to pay the minimum as it is required by financial responsibility law - they may try to recover that amount from you though if their only obligation is to meet financial responsibility law as described previously

[Finger Laker]

again - read your policy as it will conform to the laws of your state .... also get whatever you can in writing from your insurance company and it may even be worth calling your state DOI to see if they have any resources

also, if you are friendly with a licensed agent in your home state talk to them - they are required to know .... us internet hacks are not (well at least I know that I'm not licensed)

realize that by having him out of state your policy may respond to their laws if they can link him back to your policy

some terms are not defined in the policy - reside is one of them in my policy and it is fairly important .... we know what a relative is, but they have to reside .... what does reside mean?

it can be cloudy and looking at some examples in florida it appears that they do a lot of the standard stuff - do you intend to return to that place when you are not otherwise positioned? Is this where you are registered to vote? Is this the address on your drivers license? Is this where you file taxes? Is this where you maintain your banking accounts? Is this where you have your individual accounts setup?

If so it's most likely your residence

I went to school in PA, but was a NY resident at the time .... my parents claimed me on their taxes, I was insured under their health insurance (both require me to be their dependent and I wouldn't be a dependent if I didn't reside with them over 18 at that time), I had my bank accounts in my home town, I was registered to vote in my home state & district, I was called to jury duty by my home county, I had a NYS drivers license, etc

I would have been hard pressed to make an arguement that I wasn't a resident in their household and as such they would have a hard time arguing they didn't need to insure me as a resident relative under their auto policy

[Momma_bear]

Originally Posted by Finger Laker

again - read your policy as it will conform to the laws of your state .... also get whatever you can in writing from your insurance company and it may even be worth calling your state DOI to see if they have any resources

also, if you are friendly with a licensed agent in your home state talk to them - they are required to know .... us internet hacks are not (well at least I know that I'm not licensed)

realize that by having him out of state your policy may respond to their laws if they can link him back to your policy

some terms are not defined in the policy - reside is one of them in my policy and it is fairly important .... we know what a relative is, but they have to reside .... what does reside mean?

it can be cloudy and looking at some examples in florida it appears that they do a lot of the standard stuff - do you intend to return to that place when you are not otherwise positioned? Is this where you are registered to vote? Is this the address on your drivers license? Is this where you file taxes? Is this where you maintain your banking accounts? Is this where you have your individual accounts setup?

If so it's most likely your residence

I went to school in PA, but was a NY resident at the time .... my parents claimed me on their taxes, I was insured under their health insurance (both require me to be their dependent and I wouldn't be a dependent if I didn't reside with them over 18 at that time), I had my bank accounts in my home town, I was registered to vote in my home state & district, I was called to jury duty by my home county, I had a NYS drivers license, etc

I would have been hard pressed to make an arguement that I wasn't a resident in their household and as such they would have a hard time arguing they didn't need to insure me as a resident relative under their auto policy

He is still listed as a resident in our home. However, he is removed as a driver on all three cars. Progressive has this information so there is no fraud.