Was chatting about the shock of hearing friends and colleagues drastic rise in insurance rates when they added on their kid.
Was wondering how true, or uninformed the answer my client gave me. Gives me hope but wondering if its just bad advice.
For context he has a business and all his insurance, business, home, auto are wrapped up together and through State Farm. Also, this is in CO. If that matters at all.
He told me his agent has advised him against adding his daughter onto the policy until she gets to 21. Then to get a liability insurance through like General or something like that to get her started out, but cheap. The agent said because the car is in the father / wife's name that the kid is covered if any accident by fault as the car is covered. But if she ever were to get a ticket or accident that they would need to add her after.
Sounds great, but also sounds fishy. For context I know he's not lying to me about the situation and I do believe that is what his agent has advised him.
Any professionals out there that work at same company or have experience with this? I mean, if I can buy the car in my name and my kid is covered under the umbrella then why would I spend the $2000 yr (making this inflated number up) extra on insurance , especially if the tactic of waiting until they turn 21 works?
Don't rip me apart. Just the messenger here on what I want told. My client isn't going to change their ways, even if it is wrong. And maybe its shady on the agents part? Don't know, dont care. Just relaying what was told to me to see if any validity.
Talking to a client about his experience of not adding his kid onto their auto policy, but she's been driving their car for years
byu/Chance_the_Author inInsurance
Posted by Chance_the_Author
3 Comments
That’s fraudulent.
Yeah, anyone can commit fraud, agents included. It is 100% fraud in this case and they risk facing a multitude of problems, agent and customer alike.
I hate that kind of thing because people already don’t know about insurance. so an agent telling them that concealing a driver (specifically to avoid paying the correct price), is ok, just perpetuates the whole idea that it’s normal and acceptable. Until something happens and their claim is denied, rates go way up, and now the company is the big bad guy.
Not in CO but I’ve heard of this. At least with certain insurance companies (from what I’ve been told), if a driver in the household is not on the policy, they are still covered in the event of an accident. Like you mentioned, those companies will then require the driver involved in the accident to be added to the policy, causing the premiums to skyrocket. Only thing I would be worried about if I was a parent in this situation is getting sued if my child is involved in an at fault accident and the damages surpass the BD/PD limits.