<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>
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.
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