Auto insurance in parent's name as an adult

My SIL and FIL have an arrangement where my SIL purchased a vehicle, but it is titled and insured in my FIL’s name. FIL has it on his insurance policy. This has been the case for every vehicle SIL has owned.

SIL has been graduated from college and fully moved out for 8 years (also, got married.) FIL and SIL live in the same state, barely.

As far as I can tell, if the vehicle is titled to the FIL, this is all legally in the clear, except perhaps if FIL misrepresented where the vehicle is stored. Otherwise, however, I find he can legally insure the vehicle titled in his name and “permit” SIL to drive it as often as she wants.

Is there a flaw here, something that precludes coverage if she gets into an accident and it’s discovered the vehicle is only legally FIL’s possession? It doesn’t particularly bother me if that is all legal. However, SIL lives in a dense inner city while FIL lives in the rural middle of nowhere, so while my pricing background is suffering, good for them if they legally have cheaper-than-appropriate insurance.

TLDR Version:

Rastlin: My SIL and FIL are committing insurance fraud.

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See, that’s my understanding. However I am reading that car titled in your name = car must be insured in your name. I’m not seeing what happens if my daily driver is titled to another. (Edit: Found some guidance on getting insurance on a vehicle not titled to you… but not much about the legality of driving daily on another’s insurance.)

I do not know if they disclosed it is stored in a major urban center, but I suspect they have not.

I’m not even in p.and c.and I know that’s considered fraud. It’s a big problem in Brampton Ontario. They have the highest auto rated in Canada, apparently there’s a lot of people with their insurance registered in north bay…my car insurance buddies have mentioned the problem.

In the end, I highly recommended they clearly lay this out to an agent. I know they will not.

I know she has totaled a vehicle and gotten at least 1 more fender bender while on dad’s insurance and it paid out.

Ultimately, they are very difficult people to work with so after confirming what they were doing and making a recommendation I let it go. Not my problem if they get popped with fraud. But I wasn’t positive if they were doing anything strictly illegal, or are simply in “you could be nonrenewed” territory, or what.

Suppose it could depend on my state and I prefer to stay somewhat pseudonymous.

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Montana has some fuckery with vehicle registrations as well. I never fully understood it, but there was a reason that people might have a $100M vehicle collection scattered across the US… and 90% of it is titled in Montana. May only be related to antiques/historics.

Probably not get dinged with ‘fraud’, more likely if they have an accident they wouldn’t be covered. So they’re actually not saving, they’re overpaying.

Is it fraud? Yes

Will they ever get caught? No

Any repercussions? No

Unless she participates in one of those telematic programs to save on insurance she will never be found out. If she lives in an urban area and doesn’t drive much then she is probably overpaying, especially if she only carries liability coverage

Personal anecdote, when I moved from the city to the burbs my rate actually went up $10 per half year.

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So the accusation of fraud is based on misrepresenting where the vehicle is regularly parked? Or do they not identify who the primary driver is? What does that mean in terms of a car driven by adult child away at college? If you say who is primary driver and where it normally stays, is that fine?

My SIL lives in one of the highest-priced cities for insurance in the USA, while FIL lives on the outskirts of a village near the town with a grocery store. So I’m 100% certain that SIL is getting much cheaper insurance than intended.

I am not positive who they identified as the primary driver. I am quite certain, though haven’t seen myself, that for rating they “garage” it in the rural location 300 miles away from the city.

I am not sure if this is more by statute or by standard company policies, but students at college temporarily away from home with their vehicles can generally explicitly stay on their parents’ policies. When they permanently move out of the home, their insurance is supposed to be in their name. (It is possible some specific states handle this in unusual ways.)

If the company allowed FIL to carry a policy with SIL named as the primary (rated) driver and the vehicle rated as being stored in the city, I see absolutely nothing legally or morally wrong with that. I don’t think they are doing this.

The vehicle should be insured by the registered owner, so that part is correct. SIL should be a listed driver on the policy though, and the garaging location should be specified as being different than the mailing address. Agree with others she won’t be discovered unless she has an accident in the vehicle, in which case not only will she be added as a driver, but it’s entirely plausible the carrier cancels the policy after uncovering the issue.

If it were titled in both their names, and they’re in different locations, some states have weird rules about this, but I don’t think that’s what’s happening here.

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Supposed by whom? I think the key is owners of a vehicle have a legal obligation to insure a vehicle. Who and where driven is a deal between the insurer and policyholder to determine who is covered and for what price. I am unaware of any state law limiting an owner’s right to allow a properly-licensed driver to drive their vehicle.

Next thing you tell me is adult kids are supposed to be on their own cell phone plan. :rofl: :wink:

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Of course sil.could always call their broker and ask. Then you’d actually know.

I talked to my SF agent about this when we bought a car for 23yo to use.

I told them exactly what was going on-this car is for college-aged child away at college.
23yo was actually assigned to my car even though she’s the primary driver of the newer car…because it was cheaper that way.

There may be an age limit to this situation…kind of like health insurance, but I know that my situation is on the up and up since I clearly told agent what was going on.

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I’m not going to claim big-F Fraud on this, but it definitely strikes me as a smaller fraud.

That said, if an agent told me I should do this I would do the same. But very much stinks of the agent thinking “I’ll lock this person in by doing this, because they’ll probably get a higher rate quoting correctly anywhere else, but the company will never catch me on this.”

That’s the thing about car insurance. Cars pretty much cost the same everywhere in the USA. Doesn’t matter if you crash into someone in Manhattan or in Buffalo. The cost to replace someone’s ten year old Prius is basically the same

If it were a huge issue then insurance companies would assign higher discounts to the telematic based parking program. But it doesn’t so they don’t

What they care about is how many miles you put on that odometer

When i graduated college i moved to a different state and bought a car but it was titled and insured by my parents. I had no idea what i was doing, it was just lasziness/cluelessness. I lived that way for a year. After talking to some others i decided that this was REALLY common

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When we told our agent our daughter’s car didn’t live at our house any more, she said we really needed to adjust the policy to reflect that. For that and other reasons we decided it was time for her to take care of her insurance.

But the insurance company always knew she was the primary driver of that car.

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And streaming service and spotify plan and…

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Ha, I actually fooled the kid into getting her pswd on one service. Sucka! :joy:

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