Insuring teenage drivers

sharonlpksharonlpk Member Posts: 37
Our soon-to-be-17 son backed into another student's car in the high school parking lot the other day. Police were called, but he was not cited because accident was on private property.

The other family has been very considerate in waiting to get quotes for damage done to door before (if ever) involving the insurance companies. If the repair quote is something relatively 'unexpensive' <!>, then I feel we are probably better off paying it out-of-pocket rather than our insurance company paying it. By the way, no real damage to his car.

Am I using correct logic here?

Our only past experience with the insurance company is that the ONE claim we had with them (my husband backed into someone...) -- after being a customer for 15 years -- raised our premium! The claim was only for $900, the premium was raised $300 per year. I couldn't believe it, other than that one claim our driving records were impeccable....

So now I am so very leery of reporting teen's accident.... it's my understanding that since he wasn't really cited and will get no points against his license, that the insurance company would have no way of finding out.

I am thankful that his accident was minor and no one was hurt... and hopefully this will serve as a very valuable life lesson. But, I am trying to avoid it being a life lesson that will cost 1000s in additional premiums over the next years...
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Comments

  • kinleykinley Member Posts: 854
    the purpose of insurance is to prevent a financial catastrophe & not pay for small or maintence claims. I agree with your thinking and would not report minor incidents to the company. Any premium increase due to "Claim Frequency" would be more than paying for the door. Please note the above advice doesn't apply when the other car is occupied. A latent claim for bodily injury is a sticky wicket.
  • sharonlpksharonlpk Member Posts: 37
    I should have mentioned that the car was occupied.... no injuries however.... Again, very minor (thank goodness!) but causing damage nonetheless (I really think that if the bumper had been hit instead, there would have been possibly no damage at all...) At least no possiblity for whiplash claim since the car wasn't hit from behind?

    Thanks for your post :-)

    Sharon
  • kinleykinley Member Posts: 854
    If you decide to issue your personal check for the amount of repairs - you might consider naming the owner and the occupant(s) on the check. On the back where it is to be endorsed you might want to type: " This releases the payor of any and all claims and liability as a result of the accident of day/month/year." If an occupant is a minor, the parent or guardian would be named as well. Should any hint of injury happen, turn the claim in to your company. Good Luck. kinley
  • auntbeaauntbea Member Posts: 18
    Follow kinley's suggestion. A friend of mine did the same thing. Since he had a couple of drinks before this happened, he offered to write a check for the damage. The person in the other car was a local minister. The minister cashed the check and then turned the claim in to my friend's insurance company. Minister said the check was for something else and had nothing to do with the damage to his auto. My friend had never even seen this minister before. These things can come back to haunt you if not handled in a way that protects yourself.
  • sharonlpksharonlpk Member Posts: 37
    Thanks for the advice and opinions! I was thinking of paying the repair shop directly... and possibly then having the owner of the car sign a separate statement releasing us from further liability? If there has been no hint of passenger injury I'm thinking I should avoid 'putting ideas' into that minor's family by asking them to sign something absolving liability...?

    Hopefully tomorrow the car is going in for the estimate.... what appears minor to me may be an unfortunate surprise after seeing the estimate...hope not tho! Am not sure what my 'pay out of pocket rather than turn in to the insurance company' amount is :-) Probably something to do with the number of zeros, LOL!

    Thanks again for taking the time to post,

    Sharon
  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,338
    May astound you! Hopefully this won't be the case here. Last summer some idiot bumped my rear bumper in a Costco parking lot. Did he/she leave a note?....yeah, right!

    Didn't look like much but bill came to 800.00.

    I paid the 250.00 deductable and let State Farm pay the rest.

    Should they decide to raise my rates, I'll remind them that we have three cars, the house and other coverage through them and have sent them tons of money over the last fifteen years with minimal trouble. Would that make a difference? who knows?
  • kinleykinley Member Posts: 854
    hit & run claims usually are not chargeable. Not to worry.
  • kinleykinley Member Posts: 854
    Please share with us the details of the situation. What was the amount of estimated damage and what decision did you come to for paying?
  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,338
    You must be my neighbor?

    Well...good, I didn't know that, thanks!
  • sharonlpksharonlpk Member Posts: 37
    Hello everyone,

    The estimate we're going with for the car my son damaged is *only* $500.... I was soooo relieved, at least not needing a whole new Grand Am door, etc. The other car's owner has been very helpful in trying to get us the lowest cost possible, we're very fortunate!!

    This was a no-brainer for us to pay out-of-pocket thank goodness!!!!! I will heed the advice about the car's owner 'signing off' so to speak when we issue payment :-)

    Since our son wasn't officially cited due to mishap being on private property, this was probably the best way a life lesson of paying attention when driving could have happened...! Without watching insurance rates sky-rocket...

    Of course, now I'm more nervous again whenever he's out driving :-)

    Sharon
  • kinleykinley Member Posts: 854
    Having had two teen drivers - your apprehension is understood. To instill better driving each of our teens had a personal $500 deductible to pay in case of any accident regardless of fault. They each paid their deductible, but only once. The connection between the mind and the wallet is very direct. Oh yes, how does your worrying at home help them be safe while away?
  • sharonlpksharonlpk Member Posts: 37
    :-)

    Thanks for putting that worrying-stuff into perspective! The sound of his car returning to the driveway is a sound, however, that is music to my ears :-)

    By the way, son will be paying the $500...when life's lessons hit the wallet, you are right: they are much better remembered!!

    You're welcome for sharin <!>,

    Sharon
  • auntbeaauntbea Member Posts: 18
    I guess it must just be a "Mom" thing. My daughter totaled her first new car when she was 18. She is 30 now and commutes about 50 miles per day to work and back in Seattle traffic. She is now an excellent driver and I would not hesitate to ride cross country with her. However, I still worry and breathe a big sigh of relief when I see her online each morning and know she made it safely to work and back again. In only 10 more years I guess it will be grandson's turn for me to worry about. :)
  • eharri3eharri3 Member Posts: 640
    You think all the money you've been paying to yur insurance company all those years should mean you're taken care of in an accident, but they raise your premium anyway if anything ever happens, meaning they still lose no profits on on the deal because you effectiveley pay your regular premium PLUS a little bit more to cover the cost of repairs.
  • kinleykinley Member Posts: 854
    The intent of insurance is to prevent the financial catastrophe. The industry is so competitive that only due to investment income are the premiums lower than if pure losses were the only consideration. You can expect your premium for car insurance to rise due to the lack of investment income of late.
  • eharri3eharri3 Member Posts: 640
    I'm sorry, I thought the way it worked was that you pay insurance premiums so if you get in an accident, the hard earned money you've been forking over all that time pays for the repairs so you don't have to worry about paying out of pocket. The way it actually seems to work is that customers get double billed. You pay your regular premiums, and then if the unthinkable happens, you pay extra every month on top of that so that the company does not even actually have to absorb the cost of repairs.

    My opinion is that there's gotta be something wrong with a system where car owners pay money to stay insured but then when they get in an accident they would rather pay out of pocket to cover the expenses than file a claim with insurance companies whose services they pay for.
  • robertt260robertt260 Member Posts: 1
    The suggestion that you obtain a release of all claims when you pay for the car damage seems to me to be poor advice.
    If there are two potential claims against you, one for car damage and one for personal injury, you would be paying for the car damage (which you are legally obliged to pay in any event) and asking the other party to surrender a second right for which you are paying nothing. This seems to me to be overreaching and unfair and would be a poor way to repay the other party's generosity in finding the lowest possible estimate.
  • sharonlpksharonlpk Member Posts: 37
    Hello everyone,

    Last Thursday night I turned over a check for the $500 to the mom of the kid whose car my son hit.... and ended up not asking her to sign anything... I just couldn't do it as they are a very nice family and did try to be helpful to us :-) I should add that we have casually known each other for years and that helped me make this decision... I tried to reverse the situation a moment and wondered if I would have felt insulted if *I* had been asked to sign something after being so cooperative.

    I sincerely do appreciate all of the advice that was given to me here, however!!!!!

    AuntBea, thanks for sharing, it's nice to know I'm not the only mom like this! :-)

    Regarding the discussion of insurance premium payments and then submitting (or not) a claim... My husband and I had been paying--for 20 years!--premiums every year to the same company for auto and home. Almost (ok, 1 minor ticket) a perfect driving record after that, and no accidents that were our fault. *That* is why I was so upset when our rates were raised when a claim was put against us for a small repair that cost an amazing $900...!
  • kinleykinley Member Posts: 854
    Perhaps this will help. While you were making premium payments for the last 20 years you enjoyed the transfer of risk to another for 20 years. The cost of transfering a risk is promulgated by many factors including losses. If you paid a low premium for 20 years, had 0 losses, the 21st year would be of a low premium as well. When a loss costs over $500 to a carrier, it signals a change in the risk, needing an increase in premium to cover the higher risk. Claim free insureds enjoy the lowest set of premiums, all other factors being equal. It is fair to charge less to the claim free and to charge more to those with claim frequency. Past premiums cover history of risk transfer from you to the company and when your driving history changes, so do the premiums. After three years from a chargeable accident, the premium rate lowers again. The industry doesn't feel that a 20 year relationship with a company entitles the waiving of a rate increase when the quality of the risk is not the same due to the claim.
  • eharri3eharri3 Member Posts: 640
    To be a part of an industry in which the law basically makes your customers a captive audience.
  • kinleykinley Member Posts: 854
    It only says you have to be financially responsible. Besides the insurance option,you can in most states, post a $35,000 bond or deposit $35,000 cash to satisfy the financial responsibility law. Insurance is the most economical way to meet the requirement. The captive audience is served by hundreds of insurance companies regulated by 50 state commissions of insurance in a very competitive industry. Not all insurance agencies and companies are enjoying a 'captive audience' for you have the choice of the agent and/or company based on many factors. When I was an agent, the customer was always appreciated, valued, & they were placed with the appropriate company and premium as per their individual case deemed. I am not aware of another system that is willing to take so little for so much potential $$$ exposure.
    The insurance agency income less the cost of doing business, less business taxes, didn't make me a lot of $. The most viable contribution to our retirement portfolio was, as in other families, a working wife. A wise man once said," Envy of others success makes your life unhappy."
  • eharri3eharri3 Member Posts: 640
    But try to get your car inspected in many states or even worked on by most reputable mechanics without proof of insurance. Also, I don't know many people who have 35,000 to post.
  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,338
    Neither my wife or myself have ever so much as put a scratch on a car in all of our years of driving.

    we've been with State Farm for almost 20 years and heve bothered them for very little. A couple of windshields, stolen CD player etc.

    The house is also insured by them.

    And, I've shopped around once or twice when the premiums staggered me. Could we switch to Pemco or go elsewhere and save money? You bet!

    One of the reasons we stay with SF is because of the thought that if a bad accident were to happen that they would consider the 20 years of loyality (and premiums) before dropping us or raising ou rates.

    Friends tell me otherwise. They tell me that insurance companies simply don't care and would drop us like a bad habit if they suddenly decided we were a risk.

    kinley?
  • kinleykinley Member Posts: 854
    The individual "Beaners" don't have company loyalty, they move around, so they don't have an appreciation for customer loyalty. IMO Pemco is an excellent company, but not what it used to be when Stanley O. was their leader. I'll bet a Pemco agent has purchased a vehicle from you in the past & recommend you contact that agent. Loyalty is heavy at the agency level, but underwriters come and go. Other good companies include Unigard and Oregon Mutual. Because Investment Income contributes to the paying of claims, rates go up when investments go down. On the commerical side of the business, rates are increasing as much as 50%.
  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,338
    Yes, kinley, it seems like half of my customers are with Pemco.

    About twelve years ago or so, a friend suggested that we switch from SF to Pemco telling me that we would save massive amounts of money.

    So, I picked up the phone and called them.

    A guy on the phone was VERY concerned about our driving record and asked me if we had ever had an accident or moving violation.

    Never an accident, and my wife has NEVER had a ticket. I remembered that I had picked up a speeding ticket for 45 in a 35 a year before and told him that. BTW, that was my first ticket in probably ten years (I told him that) and I haven't had one since.

    " WELL, WE ONLY INSURE SAFE DRIVERS!"

    Huh...? I reminded him that this was my first ticket in TEN years!

    He mumbled and grumbled and asked what kind of cars we drove.

    Well, at the time one of our cars just happened to be a stock, nice Z-28 Camaro.

    That did it! I don't recall his exact words now, but he let me know that Z-28's are only owned by immature people who intended to drive them fast.

    I was rejected!

    Let's see now....that happened twelve years ago...no tickets since...no accidents...LOTS of money sent to State Farm.

    Think I'll stay with SF.
  • mmcbride1mmcbride1 Member Posts: 861
    I was told by my SF agent here in Colorado that since I have been accident free for over 9 years, even if I total a car, it doesn't count against me. The next accident would count, though - one freebie. So loyalty IS worth something.
  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,338
    I know of an older couple who were with AAA for something like thirty years. Never had a problem until they had the misfortune of getting rear ended THREE times within a year while sitting at stoplights.

    AAA dropped them. Told them they were "accident prone"!

    This really happened!
  • kinleykinley Member Posts: 854
  • kinleykinley Member Posts: 854
    Having been involved in the agency side of the business for over 50 years and having purchased four agencies it is my experience that though it may be logical to assume those with minor violations are worse risks, experience has taught that only the claims cost the companies. I do not believe there is a direct corollation as much as the companies would have us believe between minor violations and claims. IMO, the minor violations are used just to increase the premium. ISELL: Three "non fault" accidents is no logical reason to non renew especially when the at fault company paid the three claims and there was no cost to the company represented by AAA.
  • mmcbride1mmcbride1 Member Posts: 861
    What if they got hit by uninsured drivers? Then AAA would have to pay.
  • kinleykinley Member Posts: 854
    they are not against the innocent's record for the innocent was fault free. I don't know who the company was, but it was not AAA. AAA is only the company's agent, in this state at least.
  • sharonlpksharonlpk Member Posts: 37
    I think this thread has turned into an interesting overall 'insurance' discussion... So I'll post a question here that I originally posted some time ago under a Gap Insurance thread that I don't recall was ever replied to...

    Is there a website (or 2) that lists 'insurance value' for vehicles? For example, what the most is that a company will pay out for a claim for a specific model/year of vehicle...at what point is a vehicle considered 'totalled'....

    Also, I'm wondering: we receive quite a few solicitations from companies to be our insurance carrier... Since our rate went up after the minor accident last year, and since we've also added the teen driver since, it probably makes sense to be a little more diligent in shopping around now! My apprehension about switching is that I'm leery that the initially-quoted rate may be a bit low just to make the switch enticing... and that it'll be raised substantially the following year(s)... keeping all things equal between years one and two, has anyone had that type of experience when switching carriers?

    Looking forward to replies, Sharon
  • kinleykinley Member Posts: 854
    Visit your local Independent Insurance Agent. The " more than one company" agent. Talk to the agent rather than a Customer Service Representative, unless the CSR is also an agent with the knowledge & experience you seek. You can find an IIA by looking in the yellow pages where the "flying I" is. The "I" has an Eagle on top. A PIA agent is also to be considered.
  • sharonlpksharonlpk Member Posts: 37
    Thanks for your reply, but I'm confused as to what I'd be asking them (?) Are you referring to about whether or not the rate would increase quite a bit the second year? Don't auto insurance agents, like some other types of insurance agents, get add'l commission that first year when switching someone to a new policy?

    In my earlier post, I was kind of referring to insurance solicitations by stores, credit unions, etc. Seems like everyone nowadays is looking for insurance to offer :-)

    Or were you referring to finding out insurance value for vehicles, would an agent have that info?

    Thanks again,

    Sharon
  • kinleykinley Member Posts: 854
    All insurance premiums (rates) go up during a down market. Some Commercial Insurance is going up 50%. Some companies are canceling agencies where they are not the top company in that agency. State Insurance Regulators make sure that Personal Lines do not go up too much each year. There are many different Agency Agreements that include paragraphs on commissions. A lot depends on the agents loss ratio, volume, and payment record of accounts. Sometimes it depends on the tie he's wearing when visited by the company wheels. It takes a lot of time and effort to "move" a book of business from one company to another and the agent can't seek new customers when he spends a major effort in rewriting a book so the new company will offer an increased commission to compensate that effort. I once kept a good commission schedule by advising one of my companies that if they left the commission agreement as is, I would NOT move their book to another company. One of the reasons many banks, credit unions, and other financial institutions want to be in the agency business is the cash flow. Plus it's handy for the credit union member as he doesn't have to make the payments when it is done by payroll deduction. The biggest reason the companies want the financial books of business is for the "Investment Income" derived from the Unearned Premium. The company doesn't just take your annual premium of $365 and sit on it. They invest your premium and the interest or stock they purchase with your money is there for them to keep. That is why rates go up when the stock market goes down. Investment Income subsidizes losses and loss adjustment expenses. As for car values, I depend on the local market and classified ads. The "Books" are History of what happened before today and as long as 60 days ago. The NADA is high so as to give more for your tradein in percentage relationship to the new car you are trying to buy. Just be interested in cash difference. Read the auto classified ads in your paper and the nearest big metro paper. Only you can come up with your values. Personal note: On Mother's Day I called a dealer about an item on consignment. Asking price was $32,000. The buyer offered $25,000 and the seller countered with $27,750. Buyer accepted subject to financing and a demo ride. Regarding coverages I encourage high limits of Liability and high deductibles on Physical Damage. The budget dollar is better spent on higher limits of Liability than lower deductibles on a $25,000 vehicle. "Worry does not empty tomorrow of its sorrow; it empties today of its strength" Corrie Ten Boom.
  • sharonlpksharonlpk Member Posts: 37
    Kinley,

    Thanks for taking the time to write such a detailed response! Very timely about the increase in insurance premiums: just got our house insurance bill yesterday, up 10% since last year with no claims (of course)... am worrying about a possible 10% increase in the future then on auto premiums because that would definitely be a hefty amount what with a teen driver...! Sigh, if only our income went up 10% this past year too :-)

    In regards to values, maybe I'm confused but I was referring to not trade-in values but rather values the insurance company would pay if the car was damaged -- for example, at what point is it considered 'totalled'. I've heard these values are much less than even the lowest trade-in value?

    Thanks for your opinion regarding best value for premium dollar, i.e., higher limit of liability vs. lower deductible (esp. with the teen driver now if we're not going to claim anything!) :-)

    Sharon
  • prophet2prophet2 Member Posts: 372
    You are one of the very few who has proven capable of dispensing information about insurance to the masses. The fact is that under the current system, the 20-year policyholder DOES NOT build-up a reserve based on the premiums paid in all those years, even though he has never had a claim. The money has indeed been part of a "transfer of risk" to pay claims incurred by other policyholders who unfortunately were involved in "at-fault" accidents.

    On the other hand, companies could charge even higher premiums to build-up "reserves" (cash value, return of premium) in case no claims are filed, but consumers will protest that it's a "rip-off."

    I do not handle P & C insurance anymore, but I concur with your wise advice: high limits on liability (300K BI, 50K PD), backed with an umbrella policy for $1M, high deductibles on collision and comp (at least $500).

    Insurance is a very complex subject and not easily understood by almost all people, including those in the industry. Consumers would be wise to find qualified agents they can trust who are not only competent, but also ethical in their dealings.
  • kinleykinley Member Posts: 854
  • isellhondasisellhondas Issaquah WashingtonMember Posts: 20,338
    Sorry, it took me so long to get back.

    This was AAA in Southern California. MUCH different than here in WA.

    We were with AAA- So. Calif since I started driving. Thought they would be the same up here so we simply transferred when we moved.

    Boy, were we wrong! Service up here is TERRIBLE compared to Calif. Switched to State Farm and never looked back.
  • michaellnomichaellno Member Posts: 4,120
    I haven't seen a discussion on this topic, so I thought I'd start one. My son will be turning 15 in a couple of months, so I contacted my insurance agent (State Farm) about the insurance issues that will be coming up in the next year or two. Here's what I learned:

    While he has his learner's permit, he is covered by our policy. When he turns 16, he can be listed as an "occasional" driver on one of our two vehicles, or, if we get a 3rd car, he must be listed as the "primary" driver of one of them.

    As far as rates go, they gave me a quote for him to be the "primary" driver on our '99 VW New Beetle. Since his GPA is above 3.0, it would be approximately $130/mo. If the grades drop, the rates go to almost $190/mo.

    Now, my situation is this: wife doesn't believe in buying used cars (don't ask why; just assume it as a given). Agency suggested that a small, 4-door sedan would offer the best rates - Saturn and Honda Civic were mentioned specifically.

    Comments? Suggestions?

    PS whatever the cost, son will be paying his own insurance premiums.
  • kinleykinley Member Posts: 854
    Keep the schedule of autos the same. Changing or adding to the schedule will alert the underwriter who will want to know who is driving the additional vehicle. By leaving your policy alone, the youthful operator IS COVERED because he is not specifically excluded. The company may send out a generic "information" survey. Ignore it. Usually, the most common way to discover a new operator is via the accident reporting process. Thus, the student is a more defensive driver, not wanting to be involved in any kind of accident so as to save him or his parents a lot of money.
  • blarg1blarg1 Member Posts: 59
    umm, shop around for better rates. I don't have a teenager, but I go shopping for insurance about every three months, and guess what, the rates are a little lower every time. not by a huge margin, maybe $100 per year. I got better uses for that hundred than insurance agents do.

    this is a competitive industry, it might be worth while to shop it around.
  • randyt2randyt2 Member Posts: 81
    When my wife got a ticket for going 20 over the speed limit (just so happened during "school" hours so that the lower limit was in effect) my insurance was increased considerably. I shopped around and I found that I could save $200/6mo by switching, even though I went with a different company than my homeowner's insurance co.
  • prophet2prophet2 Member Posts: 372
    Is that $130/month EXTRA? If so, that's $1560/year more! What state are you in? I pay around that for THREE cars, all full-coverage: '87 Acura Legend L coupe; '96 3.5RL; '01 Honda Odyssey EX. I carry 300K/500K bodily injury; 50K property damage; 500 ded. collision/comp; plus 50K "no-fault" medical.

    Insurance is governed by state, not national, regulations. Even if the insurance company is a national carrier. Pay heed to KINLEY. Teen drivers living in the household are automatically covers as an "insured by definition" within the policy provisions. So is anyone who operates your vehicle WITH YOUR PERMISSION AND WITHIN THE SCOPE OF THAT PERMISSION.

    In Hawaii, it is against the law to rate drivers based on age, gender, marital status, mileage use, or length of driving experience. The only allowable factors are driving record, claims record (of both drivers and vehicles - Hondas and Toyotas are targeted by thieves and have higher rates than comparably-priced cars), type of use (pleasure, t/f work or school, business), type of vehicle (age - for comp/coll, sports cars, hi-performance). The companies can ASK questions on any of the above (that's part of underwriting), but they can't discriminate beyond what's allowed. It is common for them to send a questionnaire inquiring whether you have a "young" driver in the household when the demographics indicate that its time to ask - like when you're in your 40s and have been insuring a minivan for some time, a sure tip-off.

    If you and your neighbor have identical vehicles, use of vehicles, limits of coverage, driving record, and claims record, you should get the identical rates from the same company. The only areas of difference may be discounts for good students, driver-training, continuous longevity with the same insurer, and having other lines with that company (e.g. homeowners, general liabilty, other casualty). In fact, most companies require at least either the homeowners or auto policy be with them before issuing "umbrella" liability policies.

    But, remember that each state is different.
  • michaellnomichaellno Member Posts: 4,120
    Currently, I'm paying approx. $1500/yr for full coverage on the 2 vehicles I lease: '99 VW New Beetle and an '02 Ford Explorer (in fact, the insurance rates went down when we traded in our '99 Ford Expedition for the '02 Explorer).

    The $130/mo quote was assuming that our son would be the primary driver of the Beetle (we are probably going to acquire a 3rd car when he turns 16). That quote includes a good student discount (3.0 GPA or above) and, since we've been with State Farm for many years, includes a longevity discount as well. Also, our homeowner's insurance is with SF as well.

    So, what I'm hearing is that if we don't get a 3rd car and don't inform SF that our son turned 16, he's still covered when he drives either one of our vehicles? The agent mentioned something about an "occasional driver" rate, which sounds more and more like a profit scam.

    I was aware that anyone who drives my car with my permission is covered, guess I never thought about it applying to family members.

    So, when we get that 3rd car next year, the folks at SF suggested a small, 4 door sedan (Saturn, Honda, etc.) to keep the rates as low as possible for my son.

    Thanks for all the feedback.
  • michaellnomichaellno Member Posts: 4,120
    We're in Colorado, which to my knowledge is a no-fault state.
  • prophet2prophet2 Member Posts: 372
    That is correct. Your son is automatically covered as a related family member residing in your household. This would even apply when he's home on break from college - it is likely that his legal address is still your home. Even if he changed his residency to another state, he'd still be covered as a driver operating your vehicle with your permission.

    "No-fault" itself is often a misnomer, anyway. You're still liable for property damage to the other vehicle if you're "at fault." The NF applies to medical expenses for injuries suffered by you, your passengers, and pedestrians, regardless of "fault, but up to a limit or threshold. If you're not "at-fault," you are free to seek compensation from the other party (and his company) after reaching and exceeding the "threshold." Likewise, the other party can do the same to you if the situations is reversed. The threshold amount is a moving target here and is re-set annually.

    This system leads to "claim-building" to exceed the threshold and commence a lawsuit after the insurance company either refuses to settle or offers a "go-away" settlement which the injured party (and their attorneys) deems insufficient. After all, it's pretty hard to disprove "whiplash" and "loss of consortionship" on the part of plaintiffs.
  • kinleykinley Member Posts: 854
  • armtdmarmtdm Member Posts: 2,057
    Erie ins does this and they still have an annual policy not every 6 months. Plus, my kids, being on a seperate policy cannot endanger mine they cannot canecl mine etc if the kids screw up. For me it was the same price whether they were on mine or a seperate one.

    Son was paying about $1,200 year, $300,000 liability etc. Daughter about $800. So much depends on where you live so getting prices in this forum is sort of useless. Getting him a new car is "absolutely crazy". Not only will you pay through the nose for insurance but you can find a very safe, dual airbag, ABS etc. used car for him to start with for much less. Plus, no friends in car for first 3 months and limited to 1 firend after that. Friends in the car are proven to be a increased risk for accidents!!! Several states are passing laws preventing teenage drivers from having other teenagers in the car.
  • michaellnomichaellno Member Posts: 4,120
This discussion has been closed.