Car insurance question

Discussion in 'Military Academy - USMA' started by crazymumof3, May 22, 2012.

  1. crazymumof3

    crazymumof3 Member

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    What do you do about your plebe's car insurance (and their cars)? Since our plebe will just be home eight days between now and the end of the year and we pay over $1000 to insure him, we are at a loss as to drop him, sell the car, or what?????

    Ideas? Suggestions??

    Thanks!

    crazymumof3
     
  2. debcst

    debcst Member

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    Check with your agent- some companies offer a minimum coverage for these situations- much less expensive than the full coverage. Thanks for the reminder that I need to do this too!
     
  3. mom3boys

    mom3boys Parent

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    Our agent suggested we cancel the insurance on him. He would be covered, just as dear Aunt Marge would be if she borrowed the car while visiting. I tried to get him to ride w/ friends whenever possible while home, since he wasn't insured...just in case. Cow year he got coverage w/ USAA.
     
  4. Jcc123

    Jcc123 Member

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    There is probably a simple explanation for this, but if the above advice is correct, then why would we ever pay the higher rate to insure our teenage sons? Can I really just take mine off the insurance altogether, and "lend" him a car when he needs to drive?
     
  5. mmb5

    mmb5 Member

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    In New York State, it's the driver, not the car, that carries the insurance. One other poster here had a financial disaster when uninsured son had an accident in a borrowed car.
    Look into getting USAA driver-only policy. The rates take into account that there's no access to a car.
     
  6. another13mom

    another13mom Member

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    As indicated in the post above, our son has a non-owner liability policy w/ USAA with added riders for underinsured and uninsured motorist coverage in amounts equal to the liability coverage. He has fairly high limits of coverage (taking into account potential future earnings) and so it costs about $400/year. You can probably get it a lot cheaper w/ lower liability limits and w/o um and uim coverage. There is a potential issue re: collision if he rents a car (he should then get the rental collision only insurance) because the non-owner liability policy does not provide collision coverage. For us, it was significantly cheaper than keeping him on our policy, even with the "college student away from home" discount.

    As for the question re: why cover kids living at home if you can "lend" them your car - if the kid lives with you and you loan them your car and haven't paid a premium to cover them, they will have NO coverage at all. All policies require resident household drivers to be listed on the policy or otherwise covered by a premium in order to get coverage (otherwise, everyone would just skip insuring the kids and hope for the best). You don't want to be in this situation if god forbid your child is in an accident and is completely uninsured because you didn't pay a premium.
     
  7. hawk

    hawk ButterBar Dad

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    Most underwriters will not allow this as long as the cadet permanent address is the same as yours. Move it to USMA, and you might could get away with it, but then be prepared for NY Taxes.
     
  8. USMACandidate2016

    USMACandidate2016 Member

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    Drop him as a dependent. He can still use the car when he is home. Teenage boys always cost a boatload in insurance.
     
  9. dohdean

    dohdean Member

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    As an attorney, let me recommend that you discuss these issues (thoroughly) with your insurance agent. The laws differ in each state. Cadets at all of the Academies borrow cars -- you must be certain that your cadet/the car have adequate coverage when your cadet borrows a car, drives your car, etc. In Colorado, this is an important issue for cadets at USAFA. Many drivers in Colorado are underinsured (as I suspect they are in many states). An at-fault accident can be a tragedy for everyone involved and can ruin your cadet's financial future. There was a recent accident involving three cadets at USAFA -- one died -- an absolute tragedy, legal nightmare and financial nightmare for all involved. I know of another recent roll over accident involving a borrowed USAFA cadet car -- which totaled the borrowed car. Do not take chances with this. Do not take advice from someone who lives in another state -- talk to your agent and be sure what your liability and your cadet's liability is in your state and the state where they are attending school.

    These decisions will be different for every family based on your state of residence, the laws in your state and in the state where your cadet is attending school, your cadet's personal assets (some cadets come into an academy with their own assets -- bank account, investments, trust fund, etc. -- be certain that they, you, your assets and their assets are protected), whether your cadet (when able) takes a car to their academy, etc.

    One accident can change your cadet's financial future -- be sure you know the possible consequences of what ever insurance decisions you make.
     
  10. RockyB

    RockyB Member

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    Great advice!
     
  11. another13mom

    another13mom Member

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    dohdean said it clearer than I - you can't just drop your cadet as a dependent and expect him or her to have coverage because you "lent" your car. Given the reasonably priced options out there to make sure your cadet has coverage (ie USAA's non-owner liability coverage w/ a rider for um/uim coverage), this is not a risk you want to take. It is foolish to think that an insurance company will provide liability or uim or um coverage with such an obvious ploy, in the absence of a full-time year-round separate residential address paid for by your child. Coverage denials happen every day on identical facts. Another option most carriers (Travelers, State Farm, etc) have is to reduce the premium for a "college student away from home" - student is still listed on your policy and is provided coverage at a lower premium rate because of the expected reduced amount of time behind the wheel.
     
  12. df123

    df123 Member

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    Thanks for getting me thinking about this. I just spoke to USAA and they put my son on an "away at school discount" and put his vehicle in "storage status" which, in our case, saves about $700 per year. They told me that his coverage when he does borrow a car will be identical to the coverage that he has right now, only with a significantly lower premium.
     
  13. Luigi59

    Luigi59 Banned

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    Of course you can.

    If they do not live at your home, you can drop them and as long as they have your permission to drive when they are home on leave, they are covered 100%. Been there, done that, I have the letter from my State Farm agent stated exactly that. Cadet was dropped a month after he left for the academy, and was covered every time he came home and borrowed our car.

    As for "what is foolish" I'll say that giving blanket advice as fact, without accounting for all the variables in each state or each company's polices, is foolish.

    Each person should talk to their own agent and get whatever they tell you in writing. Relying on "forum advice" is not gonna work in civil court.
     
  14. Packer

    Packer Member

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    On the dependent part, it would seem you may have a hard time convincing the IRS yos son/daughter is a dependent beyond the year they enter the academy. Given that, I am not sure how it is different than loaning my car to uncle Joe. I of course will get it figured out with my insurance company as I really don't like nasty surprises.
     
  15. another13mom

    another13mom Member

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    All I'm saying is be careful. There aren't many free rides in life. But, if you are going to drop your cadet, and have a well insured agent who will give you a letter saying your cadet will still have coverage when borrowing your car, then go for it - ask for a copy of the agent's errors & omissions policy and make sure the limits are high enough to cover an accident like the one dohdean mentioned in case the insurance company says the agent is wrong (agents can't bind carriers w/o an underwriter's case specific approval). The insurance industry does not like paying claims - and most carriers will use any excuse available to challenge coverage - especially when the driver at issue is not a "named insured" or otherwise identified on the policy. There's an entire industry built around their denials keeping lots of people fully employed...
     
  16. GreyHogs

    GreyHogs Member

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    We have USAA and they said it was OK to drop our Plebe because it's not the normal "kid going off to college"....they are financially independent and will be home for an extremely limited period from now on. Of course they will be covered on the rare occasions they are home to drive just as they would 10 years from now if they were visiting you and borrowed your car. Contrary to previous poster, insurance follows the CAR not the DRIVER, even in NY. Insurance companies insure CARS and will provide coverage for no matter who was driving as long as they had your permission. There is no such thing as dropping a dependent resident minor from a policy or "only assigning them to one car" because the exposure is there and the company legally has to cover any household residents so typically many companies (except USAA) assign the youngest driver to the most expensive vehicle to determine rates.
     
  17. crazymumof3

    crazymumof3 Member

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    Thx all....

    It took a call to the underwriter since my agent had no idea what West Point was!!! I can drop him July 2, and when he is home those oh few days, he will be covered like dear Aunt Maggie! We will keep his car and transfer title over to him when he is a junior. He will then get USAA.

    It was explained to me that different states and different insurance companies have different rules and you just to know how to ask and to whom to talk.

    (FYI- I have since changed agents to one who knows WP!!!)
     
  18. bjkuds

    bjkuds Parent

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    For ours...(State Farm) (Doing ROTC out of state) if he is still listed as a member of our residence, which he is, there is a college student deduction of his portion which was only 30% drop even though he is only here a few weeks out of the year. It only would change if he was independent and no longer listed our home as his legal residence. Our agent said that once he commissions and goes AD then we can drop him. WP may be different for you though since he has raised his right hand already. If I were to claim him as Aunt Maggie I would be afraid of fringing on insurance fraud if I were to actually need it,, and although there may be a loophole somewhere, that possibility if he were to have an accident scares me more than the hideous premiums.. I figure just 3 more years:biggrin:
     

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