I think students are likely carved out as an exception, and use their parent’s address as their permanent address for their car, even though it’s not actually the case.
My daughter studied in NYC for 2 years. Insurance was a complete nothingburger. Our P&C person said she’s required to cross the border back to canada once every 6 months with the car, and that maintains her insurance as still living at home.
But we disclosed it and confirmed the correct path.
We had a similar situation where we borrowed a car long term from a friend. We disclosed it to our insurance carrier. The rule for us apparently was if you borrow a car more than 30 days you have to be listed, if not, not.
Owners of cars are required to insure them, but drivers are also required to have insurance for the car they drive.
I have a relative who insures several adult children and their spouses on their policy. All disclosed, including drivers, locations, everything. Apparently it’s cheaper that way. Also, they want to help their kids out a little.
Assuming the location you are asking about is in the US… I second the general recommendation to disclose it and get listed as a driver, otherwise what they are doing is probably fraud. Any policy asks where the vehicle is garaged, so not disclosing the real garaging location is probably also fraud. Will they get in trouble for it? If they don’t get into any accidents, probably not. If they do, I’m not sure, but it might be more likely. Insurance companies are able to do investigations after the fact.
Location and driver characteristics make a big difference to the pricing, so it is material fraud. (As opposed to minor inaccuracies on an insurance application, which might be less serious). Although car damage is similar across the country, different locations have different frequencies of accidents. Driving in a suburban area is usually safer than a urban area because there are less people around. Urban areas might also have higher costs of healthcare, car repair labor, etc. Urban areas are also more likely to have lawyers advertising services which could increase legal costs to settle claims. And so on. (I am leaving out all the potential differences between states because you stated this is in the same state.) Middle aged drivers are safer than younger drivers. Your FIL might have better credit than your SIL, and better credit indicates a better driver. And so on for that too.
Yes, I think so as well.
You just made up like twenty personal auto rating factors
In terms of where the car is garaged there are three primary risk factors
Wind/hail - so we like to see that a car is parked in a garage rather than under a tree or out in the open
Flood - ideally you move your car when a flood comes but if you own multiple cars in a family and park in a garage chances are you all leave in one car
Theft - you get dinged for garaging your car somewhere cars get stolen all the time. Broken windows below deductible limits are whatever
The reality of it is accidents in urban areas are typically low speed where as suburban roads have much higher speed limits and some rural areas have no shoulders plus deer running around. So it’s a wash. Because crashing at a high speed usually results in a totaled car in this day and age
Calling BS on this whole post
I think you’re the one making stuff up…
Also, in your discussion of garaging location risk factors, you’re ignoring that most of auto insurance covers injuries to people, not cars. Check your policy. What coverages cost the most? (Assuming you’re not insuring a super expensive car.) So why are you only talking about wind/hail, flood, and theft, as opposed to other location-based risks?
This doesn’t sound like you have ever looked at pricing a personal auto insurance policy, at least not in the US in the last 20 years. Even if some urban areas were cheaper than some rural areas, no one who’d ever differentiated by location would just randomly say that it’s all a wash.
I would disagree with these.
I would say that it is possible that they will “get caught” if there is a claim (with probability increasing with each subsequent claim) on the car.
And if caught, there will be repercussions. The first of which is that the policy for SIL will be terminated at the date of the claim’s accident. The likely subsequent consequence is that the FIL will also lose their coverage going forward. And most likely will find it difficult to get coverage in the voluntary market for several years.
And there is the risk of having the claim for which this situation is caught not being covered, and legal proceedings started to recover paid out claim costs–including legal and adjusting costs for those prior claims.
IATP
Not fraud on the part of the customer; but fraud on the part of the agent. Consequences here are less for the customer (driver added, info corrected, rates changed, etc; but coverage will likely continue).
There’ll be different consequences for the agent.
While true, the frequency of a claim will be very different; and the cost of a claim will be very different between the two environments as well as if the claim is first-party (think Collision coverage) vs. third-party (think BIPD liability).
What most might find interesting is that the cost of a third-party claim in an urban environment are often smaller than the more rural areas.
I don’t think that this is the case.
More likely is that various company’s experience with auto coverage is going to be pretty different based on their risk-appetite for coverage.
I would expect national insurers might have a very different perspective to pricing coverage than regional insurers.
Or a companies like The General vs. Lemonade vs. USAA etc. are likely to have some very different views on things.
Well yes, fraud on the part of the agent, and most insureds would not be sophisticated enough to know something feels sketchy. The smart insurance guy said this was a good thing to do.
We may have the knowledge to go “yeah that’s definitely wrong” but we’ll never get popped for that level of agent fuckery. It’s not like the agent told them “Just say your daughter doesn’t live at home, otherwise I need to add her as an excluded driver because of her DUIs and she wouldn’t be covered, but if she ‘doesn’t live with you’ it’s fine for her to drive it, and she could ‘move back in’ tomorrow”
Did this throughout my 20s, at one point I even called the agent to try to switch the policy in my name and he said it would not be worth the expense, not to mention dealing with the DMV. Never filed a claim and eventually dropped phys-dam when it was clear that the age of the car made it not worth the coverage.
Just curious… have you ever been a US personal auto pricing actuary who actually worked with the rating? If you find me a carrier, regional or national, new vs old, who thinks that pricing by location is a wash, that’ll be one that went out of business in the first couple years. If one such even exists, which I doubt. 
Suddenly wondering if I should stop feeding trolls.
Even at the least sophisticated companies I’ve worked at, there is some level of geographic pricing. It might be as basic as “the city of Chicago vs. rest of state”, which is not good segmentation, but is extremely important.
Not sure where territory would rank in predictiveness… it would be pretty significant, albeit less than insurance score and I assume loss history.
Yes I have priced personal auto
In general I have always associated garaging location with comprehensive claims and mileage with BI/PD/liability
Of course there is more than a single factor that goes into pricing. But I have never tapped into a billboard database to return number of billboards as a rating factor
I have actually implemented Collision surcharges for garaging.
It wasn’t as predictive and therefore the surcharge was less than for OTC, but there was a definite difference to Coll between storage in a private garage or a museum versus a carport, the road, or a parking lot. That company was for high-value collections though and we put a lot more focus on garaging than a typical PPA policy, going so far as to use Google Maps to verify your garage CAN actually fit 2 vehicles or requiring pictures if we couldn’t determine.
Crashing your parked car is like getting fired on your day off
Haha love that you guys are using google maps
For one data scrubbing project we were using the us post office website to verify zip codes (I was shocked to learn that there are zip codes with like five total addresses in the area and that new zip codes are constantly being added!)
Yes, I’d say on average a state might have 1-2 updates to their ZIP codes per year (often with several ZIP changes). Not sure if that’s defined nationally by USPS or on a state level then filtered up. Might be a little off on the frequency but I remember getting quarterly updates for what’s changed.
Of course there are PO Boxes with 0 population or area, but there are many "actual’ ZIP codes containing 1 address as well. Long ago I worked at an insurance company where their home office was its own ZIP code. I assume it made mail simpler. Arizona has a ZIP of 70 square miles with population 5.
As for the Coll surcharge, I think it’s more a behavioral difference between the person who stores their $500,000 Rolls Royce in a rented private car garage versus on the street.
Semi-related, you’d be surprised how many morons get behind the wheel of their first super/ultracar and crash it in seconds. Or my favorite, an insured idiot who put nitrous oxide into his Dodge Demon and lied about it, then when leaving a funeral hit the NOS… directly into a telephone pole… and died.
Yes; including evaluations of models (frequency, severity, and pure premium) for varying rating by garaging location for various auto coverages.
Frequency is by far the better predictor of variations in rating for most coverages; with severity models moderating the relative differences between “urban” and “rural” locations. Other Than Collision (OTC; aka Comprehensive) seems to be better predicted by a pure premium model; but differences between rural and urban is not nearly as pronounced as for BI, PD, and Collision. In fact, in some states, rural experience is higher than urban.
Some buildings in NYC have, or had, their own ZIP code. Empire State Building and Chrysler Building are/were examples. Based on the shit-tom of mail they would get, I assume. And I assume they had a Post Office and dedicated Postal Workers?
This is very different from saying it’s a wash, which was what I was responding to.
Your comments about frequency support my comments about drivers of differences by location.