Wrong address on auto insurance = fraud?

[Anne]

I'm concerned about my stepdaughter's auto insurance. She bought a new car when she moved in with us over a year ago, but she insured the car with her mother's address. Apparently, her mother talked her into this in order to keep her multi-car discount.

Could this cause my stepdaughter (age 20) any problems if she ever files a claim? (Both addresses are within 30 miles of each other in Tennessee, but I don't know how much of a difference there would be in rates.) I know my stepdaughter has a hard time saying No to her mother, but I'll insist if it puts her at risk.

 

[lars coltrane]

I can give you some thoughts, but not a true, final answer. Does your step daughter use her mom's address as her permanent address? is your place really just a temporary residence? is there a difference in rates? Do you have a good relationship with an agent that your can ask?

good luck.

[This message has been edited by m martin (edited May 31, 2000).]

 

[I AM ALWAYS LIABLE]

<BLOCKQUOTE><font size="1" face="Arial, Helvetica, Verdana">quote:</font><HR>Originally posted by Anne:
I'm concerned about my stepdaughter's auto insurance. She bought a new car when she moved in with us over a year ago, but she insured the car with her mother's address. Apparently, her mother talked her into this in order to keep her multi-car discount.

Could this cause my stepdaughter (age 20) any problems if she ever files a claim? (Both addresses are within 30 miles of each other in Tennessee, but I don't know how much of a difference there would be in rates.) I know my stepdaughter has a hard time saying No to her mother, but I'll insist if it puts her at risk.<HR></BLOCKQUOTE>


My response:

Yes. Let's assume, for the sake of discussion, that she's lied on her application concerning where she lives and/or where the car is "garaged." Insurance rates are determined by, among other factors, where she lives. If she makes a claim and, under oath, says that she was not a resident of the listed address, or the car was not garaged, at the listed address, or if she tells a lie (again), and it is later discovered that she lied under oath, then the insurance company can rescind the contract, and refund any unearned premium payments. False statements in application: "When . . . an application for insurance is a part of the contract, and the statements in the application are expressly declared to be warranties, they are to be treated as such . . . and must be strictly true, or the policy will not take effect." [Wolverine Brass Works v. Pacific Coast Cas. Co. (1915) 26 Cal.App. 183, 185, 146 P 184, 185]

So, if the policy does not "take effect", and she causes $35,000.00 in damages, but she is only entitled to a refund of premiums paid, then you do the math.

Believe me when I say, this is not unique, and she is not very smart. Insurance companies love it when they can rescind a contract, and leave an "insured" flapping in the wind.

IAAL



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[Anne]

Yep, giving the insurance company any excuse to rescind the contract, that's what I was afraid of. I'll have to insist that my husband talk to his daughter about this.

Our home *is* her permanent residence. This is the address for her employment, bank accounts, credit card, etc. Everything but that auto insurance policy... just to save her mother a few bucks. Ridiculous.

Thanks everyone!

 

[Lianne]

On a related subject, what about all those minor questions the insurance company asks when you insure a car? "Is this the vehicle you drive to work, or is it just used for pleasure? If you drive it to work, what is the driving distance?" Are those issues a big enough deal to constitute fraud if you lie? I would imagine it's a rare case that the insurance company ever tries to validate those answers in the event of a claim, but still...those are the questions that a consumer is most likely to lie about (in the interest of reducing their premium).