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Questions About Auto Insurance and Accidents

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Comments

  • isellhondasisellhondas Issaquah WashingtonPosts: 20,225
    I'll get a "mooch" buyer that I've sold to before. We got along well and it was a smooth deal. Two years later, they need another car and they will cut my throat and drive 50 miles to "save" 100.00.

    For some people, the almighty dollar is everything.
  • prophet2prophet2 Posts: 372
    I was my own agent with Transamerica (TIG) and since my homeowners policy was with another carrier, TIG limited my PD coverage to $30K and my BI to $100K single limit. I was leasing a Mazda Millenia at the time and Mazda American Credit required either $300K BI/$30K PD OR $100K BI/$50K PD. Mazda American did NOT accept my $1M umbrella coverage to satisfy their $300K BI requirement. I couldn't change my homeowners to TIG because they weren't accepting new HO applications due to the hurricane which hit Hawaii in 1992. TIG had in fact deleted hurricane coverage from their existing policies on renewal (my HO company kept our coverage and they were just a small local carrier).

    I looked for new coverage and GEICO was the only one willing to write me for the limits I needed.
    State Farm and Allstate wanted the HO, but no hurricane coverage. Liberty Mutual wasn't taking HO business. Two other carriers mass-cancelled their existing HO business, one non-renewed their auto business.

    I had to laugh when that company re-entered the market a few years back - they had non-renewed our then-mayor, who had been their client for three decades!
  • kwaycoolkwaycool Posts: 24
    Hi,

    I want to buy or lease a new car, prob a infiniti g35. My local jurisdiction has outrageous taxes, especially on a new lease.

    So, I want to get a new DL from my old state, where my mother lives, and register the car there. What do I do about insurance? I'm willing to pay the rate for being garaged in my condo, ie, I'm not going to lie to the insurance co. about it.

    Are there any issues with this from the insurance co.'s point of view?

    John
  • tornado25tornado25 Posts: 279
    Yes, there are all sorts of issues. I can't let the tax thing go without commenting that a) if you can afford a G35 (subvented lease offer or not), then to complain about the tax isn't about the actual money--I'm sure you certainly can afford it and b) if you can afford it, playing "ring around rosie" with the tax system is all the more distasteful. Your failure to comply places a greater burden on those that choose to pay--as they should. But, it's your deal and eventually, I'm betting it'll be found out and if you think paying "outrageous" taxes is bad, try paying interest and penalties.

    However, on the insurance question--an area in which I'm qualified to answer--the company may not overtly verify the state in which the car is titled, but it is SUPPOSED to be titled/registered in the state you live and insure the vehicle. For example, I live in WI. The insurance company bases my premium on where I LIVE and thus, in most cases, requires the vehicle to be titled/registered where I live. (Exceptions to this are "snowbird" type scenarios, where a person may purchase an RV or second car in AZ, register/title it there but want to insure it here, for simplicity--to keep everything with one agent. The problem with that, even, is they then aren't paying the premium for where the car is primarily used).

    The true complication probably doesn't come at application (or vehicle change) time, but at claim time. I guarantee you that questions will be asked as to why, if you live, work, sleep, breathe, play and your car is KEPT in your state why is a new car titled/registered in another. Depending on your answers, it may not result in claim declination, but it certainly will create a headache.
  • kwaycoolkwaycool Posts: 24
    Yes, you are quite right that this is not, strictly speaking, about saving money. It's not even about stiffing the government in general. It's about stiffing one particular jurisdiction who is in the middle of wasting $billions in taxpayer money and sees the motorist as a quick ATM. See my other post "Lost in the Hall" #162 for a little more context if that helps.

    As I mentioned there, I'm willing to pay Chicago-based garage insurance rates. I just need to arrange a "snowbird" type scenario with an out-of-state DL, title, & reg.
  • janzjanz Posts: 129
    in trying to obtain a DL issued by a state in which you do not reside.
  • tornado25tornado25 Posts: 279
    I sincerely believe that trying to do this will create more problems for you than whatever benefit you feel you are gaining by circumventing the tax/fee process. I said my piece and leave it at that.

    From the insurance standpoint, it's not something you want to do. Regardless of your intentions, it's possible the company can/would view this as fraud of some kind. What I mean is, they are not as bungling as the government. They can tell something isn't right--they might not figure out what you're trying to do, but they'll assume you're trying to screw them (and I believe you when you say you're not) and dig into it.
  • kwaycoolkwaycool Posts: 24
    I can't see how the ins. co. would think of it as fraud, something they have to "figure out". I want them to know what I'm up to, and write me a policy appropriately.
  • prophet2prophet2 Posts: 372
    Tornado is right. The potential problems could very well be more trouble than it's worth. That's even with you being up-front with the insurance company.

    Insurance is state-regulated even for national carriers, so the insurance has to in accordance with the applicable state laws.

    My sister shipped a 4-Runner to California where her daughter is a college student. The insurance on that vehicle is in line with California law. She did keep the Hawaii coverage in force while the vehicle was in transit, however.
  • janzjanz Posts: 129
    you want to get a drivers license and register your car in a state you do not live in to avoid taxes. THEN, you want to be upfront with your insurance company and pay the appropriate premium per where you live.

    I believe that Tornado and Prophet are right, it sounds to me like an argument could be made for fraud or at least the denial (or challenge) of a claim when you need it most. If something happens, and they need to sort this out, if there is anyway they can get out of paying on a claim, I believe they will.
  • tornado25atornado25a Posts: 33
    Yes, exactly. The point isn't that you are actually committing fraud, but if/when you have a claim and they find out, gee you live in IL, but have an IA DL and the car is registered/titled in IA, you don't think they're going to wonder why?

    Stating you will be upfront with your insurance company and just want to charge the appropriate premium is quite frankly, ridiculous. There is no premium structure designed that charges you a higher premium just to do things that are against the law. It's not about the appropriate premium. If you admitted to them "I have an IA DL and my car is registered/titled in IA and I'm not changing it", they won't charge an extra $50. They'll just say "INELIGIBLE".

    I'm not trying to beat you over the head here, but forget the legality issues for the moment. You are just asking for trouble in the long run. Seriously.
  • kwaycoolkwaycool Posts: 24
    Yeah, but there has to be more to it than that. I've already done most of this once before already. When I was in graduate school, my driver's license was from my prior address in MidSizeCity where my mother lives. I was living a half hour away in CollegeTown, so that's where the car's insurance was priced from. I recall this because when we added the car to my mother's policy, I caught a small break on my premium because the rates were cheaper in CollegeTown even though I never had a license with a CollegeTown address.

    As near as I can see, the same thing would work here except that that particular insurance company is not licensed to write insurance in Illinois.

    Btw, what exactly is against the law here? My guess is you're thinking of some kind of angle where you have to somehow be in the state where you have a drivers license, but I don't think that's right. George Bush pere was famously a "resident" of a Houston hotel room the entire time he was President of the United States.
  • tornado25atornado25a Posts: 33
    Well, first of all, that's school. Most insurance companies still consider your "permanent residence" to be MidSizeCity, even if doing so while you're in grad school is stretching it a bit. And even then, it's not a different STATE.

    "My guess is you're thinking of some kind of angle where you have to somehow be in the state where you have a drivers license, but I don't think that's right."

    What? How can you seriously conceive that you DON'T need to live in the state that issues your license. Seriously, you're a grown up now, you're not in grad school, college, or whatever.

    This is some misguided "screw the system" rampage you're on or something. The law thing is you are purposefully taking actions to avoid lawful taxation by the properly recognized authority. That's evasion and depending on the laws of IL, most likely a felony. I would think that for me, contemplating an action that requires a felony to do, it better be a hell of lot more important than avoid a few thousand dollars of tax. Is the tax unfair? Perhaps. Is it foolish? Probably. But it is indeed the law. Welcome to the real world, so please take some personal responsibility (as difficult as it may be, consider it's sorely lacking among too many people today).

    The fact is you are using your insurance company to facilitate that evasion and THAT is the PRECISE reason that in addition to the state crime, the insurnace company can surely consider it "material misrepresentation" (look it up, if you have to) and that is de facto fraud. Geesh.

    You might think now "man, all I did was come here for advice, not be insulted" (seems like that virus has been going around here lately). But, all I'm trying to do pull your focus. You've got it so stuck in your mind, for whatever reason, to avoid this taxation and I'm sincerely trying to give you fair warning that you are biting off more than you can chew.
  • rroyce10rroyce10 Posts: 9,359
    .... ** and depending on the laws of IL, most likely a felony.**

              ** I don't know for certain, but I'm pretty sure that I have enough connections to Iowa to get an Iowa DL w/o committing any fraud. I'm actually a little more worried about insuring it **

                     If you didn't think it was a crime you wouldn't be posting ..

                You college guys kill me .l.o.l. you read too many books, cheat on your tests and you finally get a piece of paper and Wango Tango your a genius .... do you think your the first one to think of this.? ..

                In Florida, we have students from Vermont to San Clemente and back again .. sooner or later some "genius" graduates (or not) and uses his mothers address in Philly and transfers the new info to his divorced Dad's address in Scottsdale, thats fine .. the problem is the ins co knows your a student and they follow your original address - and the tax has to be paid in the state you have a residence in .. knock yourself out, folks like you get caught ALL the time, all they have to do is pull your credit for the next 15/25 months and follow the paper trail ... then it will be You and Bubba as bunk mates, now there's an education ........ :))

                                  Terry.
  • tornado25tornado25 Posts: 279
    Just to clarify, for my own peace of mind,

    _____________________________________________________

    .... ** and depending on the laws of IL, most likely a felony.**

              ** I don't know for certain, but I'm pretty sure that I have enough connections to Iowa to get an Iowa DL w/o committing any fraud. I'm actually a little more worried about insuring it **

    _________________________________________________________________- ___

    The first message is mine, the second is kwaycool's, for those that are arriving late. I KNOW a law's being broken somewhere here...it appears kwaycool either doesn't or he does and wants our help avoiding it.
  • janzjanz Posts: 129
    "My guess is you're thinking of some kind of angle where you have to somehow be in the state where you have a drivers license, but I don't think that's right. George Bush pere was famously a "resident" of a Houston hotel room the entire time he was President of the United States."

    I don't think that references to the President or his father have any relevancy here or at least not to YOU or John Q. Public.

    Go to the DMV web site for the state from which you want to obtain your drivers license. I will guarantee you that proof of residency is required. If you misstate that, it is fraud. Furthermore, it is illegal to possess more than one drivers license or multiples issued by more than one state as it is a legal form of identification.
  • kwaycoolkwaycool Posts: 24
    "Well, first of all, that's school. Most insurance companies still consider your "permanent residence" to be MidSizeCity, even if doing so while you're in grad school is stretching it a bit. And even then, it's not a different STATE."

    If that's right, I didn't stretch it. The insurance agent explained to me, if I recall correctly, that the car is charged based on where it is garaged, even tho my DL and the billing address of the policy were somewhere else (MidSizeCity).
  • kwaycoolkwaycool Posts: 24
    "You might think now "man, all I did was come here for advice, not be insulted" (seems like that virus has been going around here lately). But, all I'm trying to do pull your focus. You've got it so stuck in your mind, for whatever reason, to avoid this taxation and I'm sincerely trying to give you fair warning that you are biting off more than you can chew."

    No, I really don't mind that, to be honest. It's more that I wish that if you're going to throw around words like felony you could be a little more specific. I haven't done this yet.
  • kwaycoolkwaycool Posts: 24
    I looked at that a little bit. The point is, that I have proof of residency in Iowa, or can get it without too much trouble. Ie, legitimate proof, not fraudulent. I do know there are now laws that say you can't have licenses from multiple states, so I'll have to cede my Illinois license if I do this.
  • kwaycoolkwaycool Posts: 24
    "What? How can you seriously conceive that you DON'T need to live in the state that issues your license. Seriously, you're a grown up now, you're not in grad school, college, or whatever."

    Come now. My dad retired a few years ago, and drives all around North America in a motor home. He has (or at least had) a Texas DL w/o a permanent address of a PO Box set up by an organization of retirees exactly for that purpose. After he finished the paperwork, he probably didn't set foot in Texas again for several years.

    Or, work as a bar bouncer for a couple of days, at least a third of the DLs the customers hand you will be from out-of-state.
  • kwaycoolkwaycool Posts: 24
    "In Florida, we have students from Vermont to San Clemente and back again .. sooner or later some "genius" graduates (or not) and uses his mothers address in Philly and transfers the new info to his divorced Dad's address in Scottsdale, thats fine .. the problem is the ins co knows your a student and they follow your original address - and the tax has to be paid in the state you have a residence in .. knock yourself out, folks like you get caught ALL the time, all they have to do is pull your credit for the next 15/25 months and follow the paper trail ... then it will be You and Bubba as bunk mates, now there's an education ........ :))"

    I'm not following you, Terry. What are these (nearly) college-educated geniuses trying to do?
  • kwaycoolkwaycool Posts: 24
    "This is some misguided "screw the system" rampage you're on or something. The law thing is you are purposefully taking actions to avoid lawful taxation by the properly recognized authority. That's evasion and depending on the laws of IL, most likely a felony. I would think that for me, contemplating an action that requires a felony to do, it better be a hell of lot more important than avoid a few thousand dollars of tax. Is the tax unfair? Perhaps. Is it foolish? Probably. But it is indeed the law. Welcome to the real world, so please take some personal responsibility (as difficult as it may be, consider it's sorely lacking among too many people today)."

    Rampage is a little much. As far as the tax evasion thing goes, I don't know if you are appreciating the difference between attempting to duck a tax owed to a legitimate authority, and structuring your affairs so that you don't owe the tax in the first place.

    The larger point, which I'm almost sure that you are missing, is that when a taxing authority gets too abusive, the tax base flees, at least to the extent that it can. Nobody is doing anybody any favors to pretend this isn't so or act any other way.
  • tornado25tornado25 Posts: 279
    "It's more that I wish that if you're going to throw around words like felony you could be a little more specific."

    I would be willing to bet that tax evasion is a felony in the State of Illinois. Regardless of your legitimate ability to establish residency in IA for the purposes of obtaining DL/registration/titling, I guarantee you the state of IL KNOWS you live in IL and the attempt to circumvent the tax on the car by establishing the residency in IA is sure to be viewed as evasion. If you are charged with that, it's likely a felony. Check with your local district attorney, YMMV.

    "Come now. My dad retired a few years ago, and drives all around North America in a motor home. He has (or at least had) a Texas DL w/o a permanent address of a PO Box set up by an organization of retirees exactly for that purpose."

    And again, still yet ANOTHER situation TOTALLY different than your own. Your dad isn't specifically trying to avoid tax. Texas may have favorable tax treatment for income, motorhomes, whatever. Fine. But, he doesn't have a permament residence--he's bombing around the country in a motorhome. He's got to have a place to get his mail, etc. Seems reasonable. You, OTOH, despite your efforts to convince the IA DMV that you live there, DO NOT LIVE IN IA! You live in IL. Period. That is the bottom line. The legitimacy or ability of obtaining DL in IA is irrelevant.

    "As far as the tax evasion thing goes, I don't know if you are appreciating the difference between attempting to duck a tax owed to a legitimate authority, and structuring your affairs so that you don't owe the tax in the first place."

    Ha! Well, I'll tell you what. You tell the Illinois Dept of Revenue and/or Motor Vehicles that when they figure out what you did (if you do it). Honestly, that's like saying I decided to be a crack dealer--it allows me to structure my affairs so I don't owe the tax in the first place. The problem is, even crack dealers owe tax on their income. However, most would probably prefer a tax evasion conviction over a drug conviction. What I'm getting at is that by "structuring" your affairs as you are, that in and of itself is evasion.

    You can tell me all you want how "The point is, that I have proof of residency in Iowa, or can get it without too much trouble. Ie, legitimate proof, not fraudulent.", but the fact remains you are a resident of the State of IL and attempts to obtain residency elsewhere will be looked at. Hard. Why, if he is employed in IL and owns/rents a residence in IL, does he have IA resdiency? Hmm...let's see...oh yes, he purchased a 2004 Infiniti G35 in 7/04 and registered/titled it in IA. Hmmm...beep beep beep "yes, IA DMV, this is IL DMV, when did kwaycool get his DL in IA? You say 7/04? Thank you." And if you think that's far fetched your myopia is going be corrected soon, since at least in prison you get free vision care.

    "The larger point, which I'm almost sure that you are missing, is that when a taxing authority gets too abusive, the tax base flees, at least to the extent that it can."

    Oh, I'm certainly not missing the point there. I will happily point out that I live in WI, a state that repeatedly, since I've been old enough to grasp the concept has been a Top Ten Taxed State. The problem is that you perhaps misunderstand the definition of flee, a synonym of which is not evade. Flee means move. MOVE to IA if you don't want to pay IL/local tax. Your attempts would be evasion, not fleeing.

    And to remain on topic, I AM certain that if the state doesn't figure it out, the insurance company will and when they do, it will most likely be at the MOST inopportune time. Again, slowly, "material misrepresentation".
  • blh7068blh7068 Posts: 375
    This says it all...

    "The point is, that I have proof of residency in Iowa, or can get it without too much trouble. Ie, legitimate proof, not fraudulent."

    Proof that you live there when you really dont?

    Thats pretty much like saying "I can get a REAL fake I.D."

    Dont make this harder on yourself than it really is- If you dont actually live there, youre not a resident. PERIOD.

    How can you convince yourself that your proposal is not fraudulent?
  • prophet2prophet2 Posts: 372
    For decades, Hawaii consumers attempted to avoid paying the equivalent of sales tax on new car purchases by dealing in Oregon, especially for high-priced European imports like Mercedes, BMW, and Porsche. The tax savings alone offset the cost of shipping the vehicle, not to mention any price advantage. Some Oregon dealers openly advertised this these advantages.

    Problems would occur when the buyers attempted to register their cars in Hawaii. The state tax department would then assess the tax unless the buyers could prove they had brought it in as a USED vehicle, something most of them could not. The only guy I know who could have legitimately pull this off (and I don't know if he actually did) was an Oregon native who came to Hawaii on an athletic scholarship and established himself in a very successful business career after his playing days were over. He bought his BMW in Oregon and as his parents still resided in Portland, he could have registered his car at his former address there before shipping it over.

    Our 4% general excise tax translates to dealers charging 4.16-4.2% "sales tax," which is less than the Washington and California rates. The cost of shipping often offsets the price savings of buying "overseas."
  • kwaycoolkwaycool Posts: 24
    "Dont make this harder on yourself than it really is- If you dont actually live there, youre not a resident. PERIOD."

    I don't think this is right. Residency is a legal incident that may or may not be the same place where you lay your head at night, and as far as I know there are many people for whom they are not the same.
  • isellhondasisellhondas Issaquah WashingtonPosts: 20,225
    You are trying to justify breaking the law. People here have given you sound advise that you choose to argue with.
  • kwaycoolkwaycool Posts: 24
    "What I'm getting at is that by "structuring" your affairs as you are, that in and of itself is evasion."

    Do you really know this. because I don't think that's right?

    The IRS has issued rulings to the effect that a business cannot claim a tax advantage through transactions that have no legitimate business purpose other than favorable tax treatment. But even that isn't evasion, it just means their deductions or what have you are disallowed.

    Of course my hypothetical transaction has nothing to do the Federal Income Tax, and doesn't involve the IRS at all.

    An individual, on the other hand, doesn't need a reason to do what he wants (of course there are many things that he cannot do). In particular, an individual doesn't need a reason to move to any state he wants.
  • janzjanz Posts: 129
    "individual doesn't need a reason to move to any state he wants"

    ...so who moves to another state for no reason?

    Do what you want, just do us a favor and don't come here whining that you were treated unfairly by your insurance company if something goes awry with your plan.
  • tornado25atornado25a Posts: 33
    I'm done.
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