Insurance goes with me or the car?

[Doug Lassiter]

This is an often asked question, but I'd like to get some clarification. I always thought that body injury, property damage, etc. insurance was carried by the driver, and collision was carried by the car. In that if I cause body injury or property damage with a car that is uninsured, my own insurance would take care of it, but if I damage the car, the car owner needs to have collision insurance on the car to fix it.

My State Farm agent says otherwise. He says ALL insurance is carried by the car, which means that I'd better never ever drive a car that is not insured.

My elderly mother has decided to stop driving, but would like to keep her car to allow relatives to use it when they come to visit. That might be a few weeks out of the year. Does she really need to keep up her own insurance on the car to enable that? What economical options might one look for in a situation like that? Would appreciate some wisdom here.

 

[Allen Trent]

This is an often asked question, but I'd like to get some clarification. I always thought that body injury, property damage, etc. insurance was carried by the driver, and collision was carried by the car. In that if I cause body injury or property damage with a car that is uninsured, my own insurance would take care of it, but if I damage the car, the car owner needs to have collision insurance on the car to fix it.

My State Farm agent says otherwise. He says ALL insurance is carried by the car, which means that I'd better never ever drive a car that is not insured.

My elderly mother has decided to stop driving, but would like to keep her car to allow relatives to use it when they come to visit. That might be a few weeks out of the year. Does she really need to keep up her own insurance on the car to enable that? What economical options might one look for in a situation like that? Would appreciate some wisdom here.

The correct answer is all of the above & none of the above & maybe. It depends on the situation, the use ( personal, business, replacement, emergency), the permission to use car from title holder, & the knowledge you have about a car being uninsured or knowledge a car owner might have about a driver with no license, etc, etc

When in doubt, insure it & disclose the intended use, the drivers or suffer the potential lifelong repurcussions of not having accurate coverage in a given situation.

Read the policy for definitions & coverages & exclusions

 

[Doug Lassiter]

The "when in doubt, insure it" is a VERY expensive option for a car that is used so rarely. We're talking personal business, by an insured and licensed driver, permission given by the title holder, and everybody knowing everything. One would like to believe that there are ways of managing such a situation economically.

 

[Policy Monkey]

Does she really need to keep up her own insurance on the car to enable that?

I can't speak for Oregon, but in Florida any car that is tagged and registered must carry at least the state minimum insurance, whether driven or not.

The correct answer is all of the above & none of the above & maybe.

Love that answer. Both simple and confusing as hell at the same time. Insurance in a nutshell!

 

[Allen Trent]

ways of managing such a situation economically

For the consumer or the insurance carrier? If there was a way to break even or make a profit of daily insurance, 1 of the 2000 insurance companies would offer it considering all the other bizarre insurance offerings that exist.

However, it is likely with regulations, certificate requirements, mandatory reporting by carrier to DMV, costs for MVRs, household checks, title checks, etc there isn't a premium high enough in the risk/reward math equation that the carrier is willing to trade in exchange for the chance they might roll the dice to pay a $1M claim. Add in there is no target market to take such a product to go after.

Best bet is to possibly see if your carrier will let you insure it on your policy when needed, maybe under some sort of leasing agreement. I doubt it, but only thing I could think of on the spur of the topic

 

[Doug Lassiter]

Well, pretty obviously, I'm not trying to make money for the insurance carrier.

As far as my own insurance company is concerned, if I'm not driving this other car, I'd be driving my own, so there is no risk added by allowing me to drive the other car and having my personal insurance apply.

When I drive a rental car, my insurance company tells me that my liability is covered by my own insurance, and I don't need to buy insurance from the rental company. Gee, if I pay my mother rent for the car, maybe she can call herself a car rental company?

As to a rarely driven car, I'd think the target market would be enormous.

 

[fed up]

Where is Mom's car garaged? If you drive your neighbor's car and have an accident, his insurance pays the bill. the insurance follows the car, period. If Mom live near you, put the car in your driveway and title it to yourself. the discount on most carriers policies for multiple cars will make it far less expensive for you to add it than for Mom to insure it because age becomes a factor on her policy. If it is not in tip top shape, insure it for liability only at your limits. Drive it once in a while and have it available for an out of town guest to drive with your permission. The insurance premium rate is affected by the drivers but a 2000 dodge caravan is a 2000 dodge caravan and the starting rate is the same for premium. It gets driven up by the location, driver, # of drivers in the household, credit (where allowed). If your carrier has a Drive By Mile gadget, install it in the car so that your rate is greatly reduced on a vehicle that does get driven

 

[Doug Lassiter]

Nope. I actually live in Texas. Mom lives in Oregon.

Now, the Drive by Mile is an interesting option. State Farm does have something like that. Need to ask.

 

[scagnt83]

Nope. I actually live in Texas. Mom lives in Oregon.

Now, the Drive by Mile is an interesting option. State Farm does have something like that. Need to ask.

Some states (maybe most?) allow non-residents to own/register a car garaged in that state. Call the Oregon DMV and ask.

(it just cant be to "avoid taxes" in your home state, which is only really possibly applicable to neighboring states)

Then you could get the multi-car discount plus use the driving monitor system.
(some are more than just drive by mile, they look at habits while driving as well since those systems show all kinds of info from speed, RPM, even if seat belts are buckled)

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While the coverage follows the car. I've heard before that full coverage can kick in for liability coverage if you are UNKOWINGLY driving an uninsured car. A possible likely scenario would be a policy that was not paid on time and lapsed recently.

Knowingly driving an uninsured car would be illegal and therefore not covered.
(not an auto agent though, so take that with a grain of salt)

 

[Doug Lassiter]

Thank you. That's useful info.