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      04-07-2014, 08:41 PM   #1
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Beat up car Insurance Trick...

Hey guys,

I had a quick question regarding car insurance. If you know a lot about car insurance, please help me out..

So is it true if my friend buys a 1990 ford fiesta with 112000 miles on it and claims to insurance that he drives it, insurance says okay you get to pay 68 dollars a month for it.. But in reality his M3 is under his moms name on which she's paying 95 a month for insurance, he gets to drive his m3, correct? Can someone explain to me how the "beat up car" trick works?
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      04-07-2014, 08:49 PM   #2
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Some insurance companies will allow guest/family coverage. All State does. You need to check with your provider.

If your friend needs to pull this fraud off though just so he can get cheaper insurance, maybe he should be driving a cheaper to insure car, IMO.
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      04-07-2014, 08:52 PM   #3
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Quote:
Originally Posted by m3bot View Post
Hey guys,

I had a quick question regarding car insurance. If you know a lot about car insurance, please help me out..

So is it true if my friend buys a 1990 ford fiesta with 112000 miles on it and claims to insurance that he drives it, insurance says okay you get to pay 68 dollars a month for it.. But in reality his M3 is under his moms name on which she's paying 95 a month for insurance, he gets to drive his m3, correct? Can someone explain to me how the "beat up car" trick works?
The car is insured...not the driver.

His paying $68 bucks has nothing to do with it...and if the insurance finds out he's the primary driver of the M3, they'll drop her coverage (as it's fraud). Stating that he's a primary driver on another vehicle is just covering the fraud.
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      04-07-2014, 09:04 PM   #4
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There was a kid who drove his brand new ZL1 into a pool the other day...hope he didn't ask this same question on the Chevy forums.
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      04-07-2014, 09:37 PM   #5
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FwdFtl - I dont understand how crashing a ZL1 into a pool has anything to do with what I asked?

I don't think its insurance fraud because a Farmers agent told him that. HE said it doesn't have to be a 1990 Fiesta it could be played as.. Ex. I drive a Toyota prius with a premium of 100 dollars monthly, but my dad drives an M3, and i want to occasionally drive it every week, insurance won't say no, ill be covered under all cars in the family
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      04-07-2014, 09:54 PM   #6
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FwdFtl - I dont understand how crashing a ZL1 into a pool has anything to do with what I asked?

I don't think its insurance fraud because a Farmers agent told him that. HE said it doesn't have to be a 1990 Fiesta it could be played as.. Ex. I drive a Toyota prius with a premium of 100 dollars monthly, but my dad drives an M3, and i want to occasionally drive it every week, insurance won't say no, ill be covered under all cars in the family
If you know, why are you asking?

BTW, while it's difficult to prove, it is insurance fraud. If an insured claims to drive vehicle A with 89hp, weighs 2400lbs, and is worth $1500; while actually driving vehicle B with 414hp, weighs 3700lbs and is worth $60k, it is absolutely fraud.

Whether or not it can be proved is another thing. When he crashes the M3 he and the family will have to claim that he only drives the car occasionally. Maybe they'll get away with it. Best case scenario, they'll drop them, worst case will involve their legal department.
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      04-07-2014, 09:56 PM   #7
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Quote:
Originally Posted by m3bot View Post
FwdFtl - I dont understand how crashing a ZL1 into a pool has anything to do with what I asked?

I don't think its insurance fraud because a Farmers agent told him that. HE said it doesn't have to be a 1990 Fiesta it could be played as.. Ex. I drive a Toyota prius with a premium of 100 dollars monthly, but my dad drives an M3, and i want to occasionally drive it every week, insurance won't say no, ill be covered under all cars in the family
Because you haven't crashed the M3 yet

I'm mostly pulling your chain, but honestly this all sounds risky based on my experience with ins. agents.
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      04-08-2014, 09:21 AM   #8
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When I was growing up, all members of our household who are of driving age were insured for all cars. My father didn't want to park his new 4Runner on the street at the train station so he had me take it to school and on the weekends I would drive our Camry. It wasn't fraudulant in any way as all household drivers are insured for all cars owned by said household. At least that was my understanding. Now that I'm typing it out, I wonder what would have happened if we had a weekend toy like an F355 in the garage as well... not sure on that one.
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      04-08-2014, 09:47 AM   #9
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There is no trick, I had two cars on my policy and my 335I was one of them. When I add my son as a driver they asked which car would he be primarily driving, we told them it was the Ford Flex. However, he was able to the drive the BWM no problem but his premium was based on the Ford Flex. It would have been $300 more a year to have him primarily on the BMW. In the past insurance companies use to assign new high risk drivers to the most expensive car on the policy. I am not sure what changed, but the insurance companies gives you the choose. The reason I know this is when I started driving, the insurance company put me on my Parent new car verse the older cars we owned and I had to pay the higher premium even though I never drove that car.

When we added the 3rd car a GT Mustang, his rate jump since he was now 100% on one car, again the insurance company gave us the option, as it turned out, the GT and Flex were about the same for him $1700 for a year. 100 % on the BMW would still have been higher.

When I put my son our policy I asked about him driving the BMW and they say no issue unless they find out he was driving it all the time, which was not an issue since it is my commute car. Not sure what they mean all the time, and not sure what the tipping point was.

The savings of driving a clunker or insuring the clunker is the fact you probably do not have Comprehensive and collision, only liability. The most expensive part of insurance for a younger driver is Liability and these do change with the car you are driving. The Comprehensive and collision are also a function of the car, but do not change significantly with whom is driving the car.

I will tell your insurance companies usually do not question an accident and who was driving at the time, however, if they can they will find a reason to jack your rates or refuse to cover your accident. Here is some other advise, if the kid is insuring a clunker on his own policy and driving the another car on the parent policy and they are both with the same insurance company, you are screwed any way.

Here is how I know, way back I use to borrow my sisters car, and I had an accident with her car, little damage on her car(which I fixed for her), but did $1000 on the other car. My sister agree to turn it into her insurance which was the same as my parents which I was on as well. I also agree to pay her yearly increase since her car was a junker. When the insurance company found out I was the driver, they did not jack her rates they jacked mine on my parents policy on that new expensive car.

The moral of the story, if you think you are pulling fast one, think again the insurance company will get their blood.

Last edited by Maestro; 04-08-2014 at 09:54 AM.
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      04-08-2014, 04:41 PM   #10
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Quote:
Originally Posted by m3bot View Post
Hey guys,

I had a quick question regarding car insurance. If you know a lot about car insurance, please help me out..

So is it true if my friend buys a 1990 ford fiesta with 112000 miles on it and claims to insurance that he drives it, insurance says okay you get to pay 68 dollars a month for it.. But in reality his M3 is under his moms name on which she's paying 95 a month for insurance, he gets to drive his m3, correct? Can someone explain to me how the "beat up car" trick works?
The $68 a month you'd pay is pointless along with the cost of the junk car. Like an earlier person wrote, it's the car that is insured so if you didn't have a car and were driving somebody else's car then everything's covered. Technically you're supposed to be listed as an authorized driver, even if not the primary driver, but that's not a requirement since you can let someone else drive your car.

This is not a trick at all. You're basically trying to scam the insurance and while they'd pay the first time without any real questions (assuming you're with a major provider), the second time around the insured would probably have to answer some questions and potentially make some policy changes or get dropped.

The only thing a junk other car insured with full coverage would get you is coverage in case you got a rental car.
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      04-08-2014, 07:19 PM   #11
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Quote:
Originally Posted by five3three View Post
The $68 a month you'd pay is pointless along with the cost of the junk car. Like an earlier person wrote, it's the car that is insured so if you didn't have a car and were driving somebody else's car then everything's covered. Technically you're supposed to be listed as an authorized driver, even if not the primary driver, but that's not a requirement since you can let someone else drive your car.

This is not a trick at all. You're basically trying to scam the insurance and while they'd pay the first time without any real questions (assuming you're with a major provider), the second time around the insured would probably have to answer some questions and potentially make some policy changes or get dropped.

The only thing a junk other car insured with full coverage would get you is coverage in case you got a rental car.
The role the shit box plays is justification that the kid who would garner HUGE premiums if driving the M3, actually has a shit box to drive. The number of drivers in a house hold plays into the premium on any vehicle. If there were an M3 and an AMG 63 in the house with 2 adults and 1 child driver. Those premiums will increase quite a bit. However with the added shit box the INS provider sees 3 vehicles and 3 drivers, with one driver being wet behind the ears they will typically ask which vehicle they drive and if they will have access to the other vehicles. It's true the vehicle is what is insured, but who's driving them (sex, age, DMV record, etc..) will play a large role in the premium assignment.

The same logic is applied to a house hold with 3 vehicles and 2 drivers. The 3rd (week end car) is eligible for limited use premiums as long as 2 other vehicles are charged for a daily driver premium.

So the "trick" can work. But it is fraudulent and can land a family in a shit storm should the kid wreck the M3. The INS agency will likely investigate the crash and that will likely involve questing the usage of the vehicle by the kid. If it's found out that the M3 was the kids daily and not the mothers, best case is they get dropped and worst case is they find out their prize in court. If the kid actually hurt of killed someone while driving the M3, they just need to pray because the will be found out and punished accordingly. And then likely sued by the victim. When that happens, their insurance company will drop them in a heart beat citing breach of contract, fraud, etc.. bla bla bla..

Any parent actually TRYING to get their 17 - 18 year old kid ON their policy is an idiot. As a parent with more money than brains, i would register that car in my kids name and i would give him the money to get his own insurance. I want nothing that kid does attached to me in anyway shape or form.
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      04-08-2014, 07:51 PM   #12
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Quote:
Originally Posted by five3three View Post
The $68 a month you'd pay is pointless along with the cost of the junk car. Like an earlier person wrote, it's the car that is insured so if you didn't have a car and were driving somebody else's car then everything's covered. Technically you're supposed to be listed as an authorized driver, even if not the primary driver, but that's not a requirement since you can let someone else drive your car.

This is not a trick at all. You're basically trying to scam the insurance and while they'd pay the first time without any real questions (assuming you're with a major provider), the second time around the insured would probably have to answer some questions and potentially make some policy changes or get dropped.

The only thing a junk other car insured with full coverage would get you is coverage in case you got a rental car.
Here in CA, when gaining insurance you are asked if anyone who lives in the house is going to drive the car, if so they need to be added to the policy or else they will not be covered to drive the car.
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      04-09-2014, 12:16 AM   #13
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Quote:
Originally Posted by Mr Tonka View Post

Any parent actually TRYING to get their 17 - 18 year old kid ON their policy is an idiot. As a parent with more money than brains, i would register that car in my kids name and i would give him the money to get his own insurance. I want nothing that kid does attached to me in anyway shape or form.
Read this again people. Some of the best advice I've seen given on this forum.

I personally witnessed a family friend payout $80,000 in cash (above what their insurance company had already negotiated and paid in terms of settlement) for their son injuring another driver in a rear end accident.

Had that kid been under his own policy, they wouldn't have gotten more than what the insurance company gave them. It sounds harsh, but if you have any assets worth anything, don't insure a 17 year old with a heavy foot under your own policy. Noooooo way.
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      04-09-2014, 09:04 AM   #14
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Quote:
Originally Posted by Mr Tonka View Post
Any parent actually TRYING to get their 17 - 18 year old kid ON their policy is an idiot. As a parent with more money than brains, i would register that car in my kids name and i would give him the money to get his own insurance. I want nothing that kid does attached to me in anyway shape or form.
My coworker just went through a whole bunch of crap with her "misguided" son, her rates have skyrocked due to him being on her policy, and resulting in her almost being dropped completely even though she hasn't had any problems in years upon years.

Her kid is now her demise for auto insurance due to his negligence.
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      04-09-2014, 09:06 AM   #15
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Quote:
Originally Posted by Mr Tonka View Post

Any parent actually TRYING to get their 17 - 18 year old kid ON their policy is an idiot. As a parent with more money than brains, i would register that car in my kids name and i would give him the money to get his own insurance. I want nothing that kid does attached to me in anyway shape or form.
I would tend to agree, but depending on the state, just because the kid is on their own policy will not necessary protect your assets, if they live in your house and you are financially responsible for them, as paying for their college and such your assets could still be at risk.

I personally looked at this both ways, and decided to up my coverage on all the cars and umbrella the policy with my home so that the total insurance is more then any asset that someone could go after. This was far cheaper than put a kid on his own policy with their own car which is about $3000 a year and paying it for them.

In PA my house is homesteaded so it can not be award in a civil suit, as well as any retirement account, so the only assets at risk are my savings and cars.

I already told my kids if they get into any accident which is their fault , they will loose their licences, (me taking it) and they will be removed from our policy and will not be allowed to drive our cars, there is no second chances and they understand it.

I know this does not work anymore, but when I had my accidents at first time driver, and my parent insurance was getting killed, I personally removed myself from their policy and got my own insurance and it was less, since the new insurance company had not idea of my accidents, since there were no police reports or records of the accidents. Today you can move insurance companies without them knowing about your accident records since insurance companies now report any claims you make to a national database which any insurance company can look up.

Last edited by Maestro; 04-09-2014 at 09:12 AM.
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      04-09-2014, 09:33 AM   #16
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A $1M umbrella policy is like $150/year. That would have solved for many of these horror stories.
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      04-09-2014, 03:50 PM   #17
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I have a 02 cavalier, i use it at commuter, and my 335 as "pleasure only" and it saves a ton of money. even if i drive the 335 more, im still covered all the time.

When i was growing up, we did it the same way he did it, i was rated on a shitty car, under my moms policy but drove a brand new GTI. Saved thousands of dollars
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      04-09-2014, 08:57 PM   #18
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A $1M umbrella policy is like $150/year. That would have solved for many of these horror stories.
Not when you have a driver under 25, under your roof - it's about 10x that price, if you can even get it.
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      04-10-2014, 08:59 AM   #19
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Here in CA, when gaining insurance you are asked if anyone who lives in the house is going to drive the car, if so they need to be added to the policy or else they will not be covered to drive the car.
I was basing on the assumption that the kid didn't live with his mother. If they don't live together then buying the shitty car serves no purpose. Yes, it's scamming either way.

If living together though, I still don't see the purpose of the crappy car since if you're trying to scam the insurance, what difference does it make to add another lie and say the kid doesn't live there so not add him on the policy.

I'm not saying either way is right but I just don't see a purpose to insuring a shitty car. At the end of the day the insurance will still cover the car but if they start to suspect you're not telling the truth on things they'll drop you or jack up your rates.
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      04-10-2014, 09:03 AM   #20
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Quote:
Originally Posted by Mr Tonka View Post
The role the shit box plays is justification that the kid who would garner HUGE premiums if driving the M3, actually has a shit box to drive. The number of drivers in a house hold plays into the premium on any vehicle. If there were an M3 and an AMG 63 in the house with 2 adults and 1 child driver. Those premiums will increase quite a bit. However with the added shit box the INS provider sees 3 vehicles and 3 drivers, with one driver being wet behind the ears they will typically ask which vehicle they drive and if they will have access to the other vehicles. It's true the vehicle is what is insured, but who's driving them (sex, age, DMV record, etc..) will play a large role in the premium assignment.

The same logic is applied to a house hold with 3 vehicles and 2 drivers. The 3rd (week end car) is eligible for limited use premiums as long as 2 other vehicles are charged for a daily driver premium.

So the "trick" can work.
I totally understand what you're saying. But since it's a scam either way, why bother saying the kid even lives in the household if they do. It's not like one less lie makes any difference. At the end of the day, if you have a good insurance company, for 99% of your accidents, the insurance wouldn't blink twice except if they see a pattern and then either drop you or jack up your rates. Now, for that 1% accident where you could potentially be in a lot of trouble for such as hurting someone else, well that's a different story.

I'm not saying either way is right but simply saying that the "trick" is pointless unless you need something else such as rental car coverage or whatever. At the end of the day the end result is the same thing with or without that shitty car. The insurance covers the car and makes note that this other person was driving. They may threaten to drop you unless you add this person at that time. Either way, having a cheap ass car won't legitimize anything or serve any purpose.
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      04-10-2014, 10:30 AM   #21
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These posts in their entirety are hilarious. There are no "tricks" or "sneaking one by" insurance companies.

What do you think the insurance companies primary goal is? Making money, and they are damn good at it.

The only way one can sneak anything by an insurance company is through fraud. Plain and simple. You haven't thought of some ingenious new way of reducing your premiums, or giving yourself more coverage you aren't paying for. Insurance companies pay millions of dollars to actuaries and other employess to make sure they always end up on top.

If you want to go through the fraud route and risk the ramifications...that's on you. I know I wouldn't want to be that guy at the end of the day.

Last edited by Strombo; 04-10-2014 at 11:19 AM.
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      04-10-2014, 10:52 AM   #22
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