by CP248 » Sat Feb 07, 2015 09:35 pm
Here is the scenario:
Two adults with one car in the household (MO state). Both adults have clean driving record and current driver licenses.
Adult A has car registered and a full liability, collision plus comprehensive policy in place.
Adult B rarely drives (when/if it happens it would be Adult A's car only) and is not yet listed under Adult A's policy.
About the current scenario:
Is adult B breaking the law driving the car?
In case of an accident (adult B driving) what is covered and not covered by Adult A's policy?
The alternatives:
1) I understand the usual option is to include Adult B on Adult A's policy.
2) What about "non-owner" or "self insurance" ? (totally unsure of the technical name for such policy/coverage but hopefully close enough to get the idea)
I'm trying to understand pros/cons to each alternative (that is if the second alternative is available). And a general idea of the costs/risks associated with either option.
Finally, besides rental insurance, is there any other alternative to provide legally required insurance coverage for a person not owning a vehicle but seldom driving one?
Thanks for your input
CP
Two adults with one car in the household (MO state). Both adults have clean driving record and current driver licenses.
Adult A has car registered and a full liability, collision plus comprehensive policy in place.
Adult B rarely drives (when/if it happens it would be Adult A's car only) and is not yet listed under Adult A's policy.
About the current scenario:
Is adult B breaking the law driving the car?
In case of an accident (adult B driving) what is covered and not covered by Adult A's policy?
The alternatives:
1) I understand the usual option is to include Adult B on Adult A's policy.
2) What about "non-owner" or "self insurance" ? (totally unsure of the technical name for such policy/coverage but hopefully close enough to get the idea)
I'm trying to understand pros/cons to each alternative (that is if the second alternative is available). And a general idea of the costs/risks associated with either option.
Finally, besides rental insurance, is there any other alternative to provide legally required insurance coverage for a person not owning a vehicle but seldom driving one?
Thanks for your input
CP
Posted: Sun Feb 08, 2015 06:37 am Post Subject:
The big issue is called material misrepresentation. Almost all carriers now ask the insured to list every one living in the household that is older than a certain age. Regardless, if the application was not completed correctly then once an accident happens the insurance company can cancle the policy as never in-force. So Adult A and B would be left to address the accident on their own. Sometimes the carrier will extend coverage but you'd be rolling the dice on thousands of dollars.
Cheapest way to address the situation is simply add Adult B to the policy as should be done.
Can Adult B be arrested? No.. as there is "proof of insurance" in the vehicle. No one will know if insurance will be provided until once a claim is reported.
A non-owners policy is going to be _very_ expensive and the owners insurance would be primary. So the claim would get reported to the owners policy and they than may ending up cancelling the policy anyway.
Posted: Mon Feb 09, 2015 01:40 am Post Subject:
Thanks for you reply. I knew that adding adult B to Adult A's policy was the most likely course of action.
About material misrepresentation:
Adult B is part of the household just recently, Adult A's policy was issued even before Adult B was acquainted.
Is there a legal requirement (as in a time limit) after any person moves into the household for the policy owner to report it to the insurance company?
Thanks again!!
CP
Posted: Mon Feb 09, 2015 01:59 pm Post Subject:
s there a legal requirement (as in a time limit) after any person moves into the household for the policy owner to report it to the insurance company?
Only as far as what is stated in your application and policy.
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