by Guest » Tue May 18, 2010 03:02 pm
Hello everyone,
My husband and I have our own auto insurance policy on our own car. Recently my sister will move to live with us in our house maybe for a few years, I heard that we have to add whoever lives in the same household onto the auto policy, do I have to add my sister to my auto policy?
My sister had 2 at fault accidents during the last 3 years, she currently has her own car and own auto insurance, can she just move in to live with us and we each still keep our auto insurance separate?
I am concerned that if I add her to our auto policy, our rate will increase, my husband and I never had any tickets or accidents.
Could you please provide me with some advise?
Thank you.
My husband and I have our own auto insurance policy on our own car. Recently my sister will move to live with us in our house maybe for a few years, I heard that we have to add whoever lives in the same household onto the auto policy, do I have to add my sister to my auto policy?
My sister had 2 at fault accidents during the last 3 years, she currently has her own car and own auto insurance, can she just move in to live with us and we each still keep our auto insurance separate?
I am concerned that if I add her to our auto policy, our rate will increase, my husband and I never had any tickets or accidents.
Could you please provide me with some advise?
Thank you.
Posted: Tue May 18, 2010 03:16 pm Post Subject:
I am concerned that if I add her to our auto policy, our rate will increase
Of course it will. The good news is that you don't have to "include" her. You probably want to "exclude" her instead, based on her driving record.
But you MUST understand that if she's excluded, you cannot allow her to drive any of your vehicles, even when "it's an emergency" (like, my car's out of gas, can I borrow yours? I'm just going to the store. I'll only be gone 5 minutes.), because an excluded driver means just that, no coverage for you with them SPECIFICALLY behind the wheel of your car. Not the preferred position you want to be in, I would think.
Usually you need to inform your insurer of all licensed drivers in your household so they can require you to either include or exclude them in your coverage.
You and your husband would probably want to be excluded on her policy, too.
Posted: Tue May 18, 2010 03:48 pm Post Subject:
Thank you very much for your reply.
Is it because we are sisters (family members), that we may have to exclude from each other's policy?
When I was younger, I to shared a place with a roommate for several years, we each had our own car and own auto policy, we never drove each other's car and we never thought about that we need to inform the insurer to include or exclude each other, could this be the same case if my sister moves in with us?
You also mentioned "You and your husband would probably want to be excluded on her policy, too.", will this affect our or her premium as well?
Thanks a lot.
Posted: Tue May 18, 2010 04:59 pm Post Subject:
Are you excluding because you're sisters? No. You're excluding because a driver with a poor driving history is living in your home and potentially could take your vehicle with or without your permission, potentially exposing you to liability for their continued poor driving. You wouldn't want to risk losing your home and your life savings because you allowed a poor driver to use your vehicle, would you?
When you were younger, you were unaware of the risks. Today, with your sister moving in, you should be a lot wiser along with being a little bit older. Whether your sister has her own car or not, is not the issue, if she's excluded from your policy, you should be insulated from the financial liability of her driving behavior if she gets behind the wheel of your car.
Of course, when she totals your car, she probably won't have the money to cover it, so if you're not currently carrying uninsured motorist coverages, you should consider adding it.
Being included or excluded on her auto insurance has no effect on your premium. Including her on yours definitely will. If you choose to include her, you should expect her to pay for the coverage, not you and your husband. Chances are, she won't have the extra $400-$500 (or more) every 6 months.
So keep it simple, exclude her and make sure she understands what EXCLUDED means. It will either keep your relationship as sisters intact, or she'll be mad and move out. Either way, you protect yourself.
Posted: Tue May 18, 2010 07:21 pm Post Subject:
Thank you so much for your time and explanation.
May I ask some related questions for my own understanding?
Does this mean if my roommate took my car and had an accident and if I did not exclude my roommate, then I will liable for the consequences not my roommate? If so, I got lucky when I was younger, I should definitely keep in mind the risks now.
Posted: Tue May 18, 2010 08:58 pm Post Subject:
Not that you would necessarily bear primary liability, but since it is your car, you could. Auto insurance contracts vary some from one company to another. The single most common change to one's coverage when an unlisted driver uses an insured vehicle is a reduction of liability limits to the state minimum.
Most homeowners for example carry higher auto liability limits (100/300 or 250/500) than minimum. When they let their next door neighbor use the car to run an errand, the limits could drop significantly. If held to share in the liability for the neighbor's driving, the reduced limits expose the insured to huge out of pocket losses when their neighbor's insurance is also inadequate.
The theory is called "culpable negligence" -- you are partly to blame (culpable) because if your neighbor (roommate) had not been driving the car at that moment, the entire accident might not have occurred.
Yes, count your lucky stars for the innocence of youth.
Posted: Wed May 19, 2010 11:32 am Post Subject:
I would also like to know that if someone sues you for an auto accident and the amount is over your auto policy liability limits, and they then sue you or try to get a judgement on your home and life savings, if you have Homeowners Insurance liability, would this homeowners policy liability defend and cover for the excess amount of auto accident suit and protect the home and savings of the person been sued?
Thank you.
Posted: Wed May 19, 2010 04:41 pm Post Subject:
Marili . . .
Your question is an important one that many folks overlook. The answer, generally, is no. Your homeowner's policy includes "personal liability" coverage, but specifically not any that would be properly covered under an auto policy or a business owner's policy. Homeowner's also covers members of your immediate family (your sister could possibly fit that definition, you'd have to read your policy to know for sure).
To be protected against the liability claim that exceeds your auto policy, you need an "umbrella" liability policy. You can get $1,000,000 or more for pennies on the dollar (usually in the neighborhood of $250-$300 per year). It does require that you carry high limits of liability on your homeowner's and auto policies, and is considered "excess" coverage -- it only pays after your other coverage is exhausted.
Highly valuable in the right circumstances. It would be a second line of defense against your home and savings.
Posted: Wed May 26, 2010 03:27 pm Post Subject:
Great questions Marili and great answers from everyone. I just wanted to clarify one point. Having an insurance policy is not what makes you liable, it is the law that makes you liable. An insurance policy is there to pay the damages you are found liable for. It is a common statement, I often hear it from parents “I don’t want to put my kid on my policy because I don’t want to be liable for them.” The liability exists whether or not the insurance policy does. All the insurance policy does is pay for the claim if and when the kid gets in an accident.
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