Car insurance for your cadet - save some $$$

[bandit]

Yes, many states require proof of insurance to have a drivers license. Usually those states have the lowest insurance rates because they have far fewer uninsured drivers.

for those that don't own a car, what do you need a license for if you don't own a car?

 

[onlyplaying]

In Texas when you go to get a DL, they ask you if you have a vehicle in your name. If you say "Yes" then you need to show proof of insurance for the vehicle. If you say "No" then there is no proof needed and you get a DL. It's actually a silly question, because it's not like they check at that time.

 

[Luigi59]

Yes, many states require proof of insurance to have a drivers license. Usually those states have the lowest insurance rates because they have far fewer uninsured drivers.

for those that don't own a car, what do you need a license for if you don't own a car?

So if I sell my car and don't buy another one, I have to give up my drivers's license?

Because I'm certainly not going to continue to pay an auto insurance premium on a car I no longer own.

What an odd law. Thanks for the heads up, I never knew of such a thing.

 

[bandit]

So if I sell my car and don't buy another one, I have to give up my drivers's license?

Yes, that is exactly how the law works in my state. Like I said before, if you don't have a car what do you need a license for? You can always get a state ID if you need it for ID. But why should people be allowed to drive around without insurance?

They do nave provisions for those that need to drive vehicles at work. They just bring proof of insurance from their work to get or keep their license. The idea is to make sure that everyone that is license has insurance. If they did that in more places, insurance would be so much cheaper for everyone.

 

[Texasrocks]

Yes, that is exactly how the law works in my state. Like I said before, if you don't have a car what do you need a license for? You can always get a state ID if you need it for ID. But why should people be allowed to drive around without insurance?

They do nave provisions for those that need to drive vehicles at work. They just bring proof of insurance from their work to get or keep their license. The idea is to make sure that everyone that is license has insurance. If they did that in more places, insurance would be so much cheaper for everyone.

in texas you need to have proof of insurance to register the CAR which makes sense because the insurance is tied to the car. They have a database that is or is going into effect where an office can call in the license plate and determine if the car has current insurance. This Eliminates the gaming that goes on whereby people get insurance for a month to reg. the car and then cancel.

 

[another13mom]

For what it's worth, our son has a non-owner liability policy through USAA, which for him, includes underinsured and uninsured motorist coverage. So, he is essentially fully covered whether driving a vehicle or if injured as the result of an uninsured driver. The price per year saved us a half of the cost of keeping him on our policy and dropping him completely would leave him unprotected should he ever be in an accident with an uninsured driver.

 

[bandit]

our son has a non-owner liability policy through USAA

But that is liability only. Doesn't cover comp/collision

essentially fully covered whether driving a vehicle or if injured as the result of an uninsured driver

Since there is no comp/collision if he drives a car (borrowed) that doesn't have insurance and has an accident. He will be paying to repair the car out of pocket. This is where people have been caught off guard in the past. They thought they were covered and they weren't.

I believe cadets are only required to have liability insurance on their vehicles, so technically a vehicle could be completely uninsured for comp/collision. Therefore, all cadets when borrowing cars should be fully prepared to pay all damages they cause out of pocket if they don't have another means (insurance that covers) to pay for it.

Why would a cadet not have comp/collision? If the vehicle is only worth a few thousand dollars, it may not make sense to pay $500/yr to have the comp/collision coverage.

 

[another13mom]

^^ If my son is driving someone else's car and causes an accident, his non-owner liability policy covers liability for both personal injury and property damage (as in the property damage to the car he is driving but does not own). This is a non-owner policy so it envisions covering someone who doesn't have a car, and thus someone who wouldn't have purchased collision coverage. Bandit, I would greatly appreciate any insight you have if I am wrong -- but my son's dec. sheet lists liability for personal injury, property damage, underinsured and uninsured motorist coverage and there is no exclusion for any liability he could have for collision damages.

Also, our state, like all others, certainly permits people to have a driver's license w/o proof of insurance -- a lot of people have driver's licenses and do not own vehicles. You cannot REGISTER a CAR without proof of insurance but you can certainly have a driver's license. Where do you live Bandit?

 

[bandit]

Also, our state, like all others, certainly permits people to have a driver's license w/o proof of insurance

I live in NC and I can assure you, you will not get a driver's license here without providing proof of insurance from the insurance carrier. If you cancel your insurance or it is canceled for any reason, the insurance company is required by law to notify DMV within 10 days and your license is revoked.

as for the property damage covering a vehicle. Perhaps it is different where you live or perhaps you should specifically ask your carrier. In NC, "property damage" coverage is to cover property, like if you hit a sign, or a building or someone else's car. That would all be paid from the property damage portion of the coverage. But you could have a car here and have property damage coverage and not have comp/collision and have an accident and total your car and another car. The other car would get repaired from the property damage portion and your car would not get fixed/replaced.

Perhaps since it is a non-owner policy, that the property damage would cover the car being driven. I don't know, seems odd to me. I don't have USAA and State Farm doesn't offer such coverage.

If it was me, I would specifically ask USAA. If my cadet drives someone elses car and crashes it, will the coverage pay to have that vehicle repaired/replaced. Just doesn't seem to make sense to me that they would put themselves on the line for that much money for such a small premium. Hope I am wrong.

 

[aggie83]

" If my son is driving someone else's car and causes an accident, his non-owner liability policy covers liability for both personal injury and property damage (as in the property damage to the car he is driving but does not own). "

That is not true about the non-owner liability USAA coverage. The key is it is a non-owner LIABILITY policy. It is liability only and does not cover property damage to the car he is driving. You cannot purchase insurance that will cover property damage to a borrowed vehicle. Period - sorry but that is the way it is. If someone is telling you otherwise, either they have not told you right or you have not asked all the right questions.

It is true that cadets are required to show liability coverage in effect to get a parking pass at the Academy. Therefore, the borrowed cadet's car should have liability coverage on it. However, if it had expired, then the USAA non-owner liability coverage would cover the liability part but still no damage to the borrowed car.

Believe me, I have had to investigate all this much more than what I wanted to after the wreck in the borrowed car. That is why I try to encourage my cadet to rent a car and get the coverage, but he continues to borrow cars.

 

[another13mom]

Aggie83

Thank you for the information. Evidently I misunderstood the coverage. I will be calling USAA to ask the right questions as my understanding was that he was covered for personal injury and property damage caused by him while driving a non-owned auto and that the definition of property damage included damage to a vehicle he was driving but did not own. Thanks for the heads up, I appreciate it!

 

[ElSib]

I live in NC and I can assure you, you will not get a driver's license here without providing proof of insurance from the insurance carrier. If you cancel your insurance or it is canceled for any reason, the insurance company is required by law to notify DMV within 10 days and your license is revoked.

Being from NC myself & having to insure twins (one now at JV), we most definitely had to have insurance on them for them to get a license. I do not think they have to have proof of insurance after that though. Since insurance is on the vehicle rather than the individual, DMV requires that you turn in the license plate of the vehicle that was dropped but does not revoke the drivers license on any drivers insured on that vehicle.

 

[bandit]

I do not think they have to have proof of insurance after that though.

I'm going to disagree with that.

This is what the State Farm underwrite had to say when we decided to remove him from our policy when he left for BCT.

It appears to me that this insured will have to either pay for his son to be keeping his son's license in an active status, or have his son surrender his license.

We opted to remove him from our policy and saved a huge amount of money. (He had two accidents while in HS).

About two weeks after removing him from our policy, he received a letter from the DMV here at home stating that his license was no longer valid due to lack of liability insurance.

Not a problem. He just went to Colorado DMV and got a Colorado license.

 

[ElSib]

Thanx for the info, good to know. I'm still looking at my options. No accidents or citations but still seems insane to pay those premiums for as little as they'll be at home from USAFA. (Her twin is going to Appalachian but not taking a car so I'm looking to see if I can get a break there as well but probably not fully remove.)

 

[bandit]

(Her twin is going to Appalachian but not taking a car so I'm looking to see if I can get a break there as well but probably not fully remove.)

I have a daughter that also left for College last year. We received a break on insurance, but not much. Mostly because we previously had her rated on our older vehicle. We took the older vehicle out to the USAFA so when they changed my daughters status, they had to rate her on one of the new vehicles, so it was almost a wash.

 

[pjnavy82]

From the WebGuy forum

After lurking for awhile I thought I would paste some info from a thread called "COLORADO DRIVERS LICENSE" on the WebGuy forum. I'd like to give credit to Kim who spoke to USAA to get the straight scoop. Cadet property insurance is also covered:

Very confusing here so I decided to call USAA one more time to verify. Xxxx, your post is spot on but for a couple of things -- they also told me she would be considered a "non-operator" which means she will not be home regularly or driving our cars (we live in Georgia). She is listed as an AF cadet with USAA. Basically they are "honoring" our future military personnel by extending to her the same coverage my husband and I have. This did save us about $250 per six months. As far as the 3 week summer break, the USAA lady told me normally you have to add them back on if they are home 21 days or more (that is the cutoff point) but she is noting in my policy that we do NOT have to add her back on but she will be covered (by the time they transit to and from USAFA, it probably is a little less than 3 weeks). She stressed this extra type of coverage is a courtesy USAA extends.

Here is the kicker -- the insurance goes with the car. So if my daughter is driving someone else's car and gets in an accident, then that person's car insurance is first on the coverage. If that insurance is tapped out, then my husband's and my USAA insurance would be secondary for coverage, minus our deductibles. She was very specific that it covered liability, property damage, collision and comprehensive. I will tell you that my son borrowed cars like crazy when he was there -- once he got his car as a junior, he then got his own USAA policy -- he wanted to extend the same courtesy to underclassmen as had been extended to him, but my husband and I did not want the responsibility in case something happened. So he had his own policy from there on out.

Was then transferred to the rental property division -- the basic policy for coverage for cadets is $5,000 worth of coverage for $74.54 per year with a $100 deductible. This covers 3,000 for computers and this is only for NAMED perils (fire, theft, rain, etc.). If you want the other coverage for non-named perils (he called them bad luck), that is an additional $26 per year and will cover spilling a glass of water on the computer, dropping it, etc.

Hope this clears it up for folks -- should probably start a string entitled insurance coverage vs. drivers license as I'm sure lots of parents are wondering about all this...... and if my daughter signed up for rental insurance at I-day, we will just have to check out each policy and go with what's the best deal.

Hope this helps!

PJ

 

[dohdean]

Definitely check with your home (state) insurance carrier. Your cadet may begin borrowing cars at the end of 4th class year (I've been surprised the number of times my daughter, now a 3rd class cadet, has borrowed cars this summer). Colorado has fairly low required insurance rates (25/50) since a change in Colorado insurance laws a couple of years ago. You may decide that you want your cadet to have more insurance coverage available than what is available on a car that they borrow from another cadet who carries minimal coverage.

We live in Colorado and have kept our daughter insured on our policy and on our umbrella policy -- remember that your cadet may be loaned a car with minimal insurance coverage-- in the event of a serious accident with serious injuries you want to be sure that they have enough insurance -- we never want to believe that our kids will make a serious driving mistake or that they might be involved in an accident with a driver who has minimal coverage, but they can and you want to be sure that they have enough coverage.

This may not be necessary, but could come in handy if there is a serious accident, with injuries, when your cadet is driving someone else's car.

You can't be sure what kind of coverage another cadet carries -- Colorado has low required insurance limits compared to some other states. Our legislature has done away with traditional no fault. You won't know (necessarily) when your cadet is borrowing a car and you won't have any idea (nor will your cadet probably) as to the insurance limits, or the possible insurance exposures, of someone else's policy. I do not think that cadets ask each other about insurance coverage before borrowing a car -- even though they should.

For us, it has been worth it for the peace of mind to keep our daughter on our policy and on our excess policy -- in case the unthinkable happens and she borrows a car and has a serious accident with serious injuries. Yes, we could save money by taking her off our policy -- but to us, it hasn't been worth it in the event of a serious accident.

Our position on this may be different from yours as our daughter is often home on weekends (since we live so close) and is often driving multiple people in her car. Also, she and her friends are often borrowing cars at the academy. So this is really dependent on your cadet's car usage.

 

[blackhawkmom]

this is great advice---have been told we will save close to 600 a year --that will pay for maybe two visits!

 

[DevilDog]

The biggest problem is that it seems you can't get a consistant answer regarding auto insurance questions. When I called my Nationwide Agent, she said that I could drop my son from the policy since he is away at the Academy and the cars are insured anyway. That brings up the next question, if the cars are insured then why do I have to pay for my other sons and daughter on the policy? I could not get a straight answer about that. My wife claims that since we pay to cover the cars, if the kids are driving them then they are covered. I pay for each of the kids because I don't want the risk. Right now I have 6 cars, 2 motorcycles on the policy and I pay around $ 675 per month. I think that is ridiculous since there are no tickets or accidents on our records. It is all a big scam. Does anyone know if there is a policy to cover all these as a group? We also have three policies because you can only have 4 cars on a policy, and the bikes are covered separately.
Are we eligible for USAA since our children are at the Academy? Will we ever be eligible? I am paying $ 8,100 per year for car and bike insurance, but we all have cars and the kids are all drivers. Next year my 15 year old gets his license, I know that is going to be painful.
Sorry for the long post about insurance, but it really po's me. I also pay $ 1,100 per month for Medical, vision and dental. It is crazy!!!!!

 

[Luigi59]

Never forget the two most important rules when dealing with insurance companies - USAA, State Farm, Allstate, Progressive, GEICO - it doesn't matter - they all exist for one reason - to make money.

I'm not saying there is anything wrong with that, every business in business today should have the same goal.

Taking in less money on premium payments and paying our more in loss claims is not their primary mission.

And they will do whatever they can to get out of paying for a claim. There are entire departments at every insurance company that do nothing but figure out ways to deny coverage on claims, reduce the payment on valid claims, or shift the claim burden to another insurance company.

Never forget, it's a business, and as soon as you have a major claim with any of them you'll see it first hand.

Protect yourself by having an attorney verify everything an insurance company salesman tells you. The $150 spent on the lawyer may save everything you own.