Return-Path: <@edrc.cmu.edu,@it.sei.cmu.edu:bjz@SEI.CMU.EDU> Received: from EDRC.CMU.EDU by K.GP.CS.CMU.EDU id aa20476; 17 May 93 9:37:08 EDT Received: from it.sei.cmu.edu by EDRC.CMU.EDU id aa19620; 17 May 93 9:36:51 EDT Received: from localhost by it.sei.cmu.edu (5.65/2.5) id AA17074; Mon, 17 May 93 09:36:42 -0400 Message-Id: <9305171336.AA17074@it.sei.cmu.edu> To: bovik@cs.cmu.edu Subject: CAVEAT: Cancelling your car insurance Date: Mon, 17 May 93 09:36:41 EDT From: MoMo In article <1993May6.105638.14874@sei.cmu.edu>, I wrote: >Subject: Verify this absurd car insurance law >Date: Thu, 6 May 1993 10:56:38 EDT >I recently donated my car to Goodwill since I could no longer >afford to maintain it. I have no plans to buy another car within >the next few years, at least. > >I've had car insurance with Nationwide for three years and my >current policy expires at the end of the month. > >I phoned Nationwide to let them know about the status of my car. >I was told that if I cancel the policy at any time, I have only >30 days to purchase a new car...after that period, my next car >insurance purchase would automatically be assumed into the "high >risk" category because I would be unable to prove having had >previous auto insurance. If I let my policy expire naturally, >the same thing happens. > >According to the agent at Nationwide, the only way that I can >avoid being thrown into this high risk category automatically >(other than buying another car within 30 days) is to continue >insurance payments (on a phantom car). The agent indicated that >the coverage and corresponding rate could be reduced to the >absolute minimum to make it easier for me. > >None of this makes any sense to me except for the fact that this >[bizarre] policy originated and is practiced in New Jersey. > >According to the agent, this has been the law in Pennsylvania for >three years and the insurance company itself is powerless to >change or get around it. > >Have other people heard of this law? > >And is there NO way to prove that I did indeed maintain this >insurance for three years and that I ELECTED to cancel the policy >because the car was sold/donated? Are there no exceptions for >people who sold/donated a car (or who otherwise might have >legitimate reasons for having gaps in their auto insurance)? > >Please send mail to me if you have any information about this >aspect of auto insurance (or if you've ever been in a similar >situation and found a way around it). The replies that I received to this question are included at the end of this message. It would seem that for many people, there is indeed a way to circumvent this weirdness: You can maintain an uninterrupted history of auto insurance by putting your name on another person's policy. The catch, however, is that you must live in the same house with the policy holder. This is not a problem for me; in fact, I've been listed on Bradley's insurance for over two years. However, the people at Nationwide skirted this issue when I raised it. They indicated that they were uncertain as to whether this would constitute an "uninterrupted policy" and that I'd proably still be considered high risk should I purchase another car in the future (beyond 30 days from the expiration of my current policy). I learned that the governor's hotline has a division that handles insurance issues. The people at this division indicated that maintaining my car insurance history via another person's policy would most certainly work for me (given my particular circumstances). They indicated that doing this would prevent me from being considered "high risk" should I decide to buy another car in the future. However, hey also indicated that this will only work for me providing that I: * Continue to live with the policy holder * Maintain a clean record with the Bureau of Motor Vehicles If being added to another person's policy is not an option, the governor's office indicated that someone needn't be considered a "high risk" automatically should they decide to buy a car in the future. The man that I spoke with indicated that there's an additional type of insurance status called "clean risk." This category applies to people who maintain a clean record with the Bureau of Motor Vehicles. This category offers rates that are lower than those offered to the "high risk" people (although the rates will still be higher than what you'd pay had you maintained an uninterrupted insurance history). (I'm uncertain as to how the clean risk status is "applied" to people who maintain clean driving records elsewhere (in another state) but then become a Pennsylvania resident.) Some people contacted me about particular problems that they had when they left the country (and in some cases, the state) temporarily. They indicated that they lived outside of the country and allowed their Pennsylvania insurance to lapse since they established auto insurance elsewhere (another country or another state). Upon returning to Pennsylvania, these people had difficulty re-establishing reasonably-priced auto insurance even though, technically, they maintained auto insurance history in that other country or state. Their circumstances were probably unique but I believe that a common denominator across the cases was that they did not retain car insurance with a company that covered (or offered insurance in) Pennsylvania; therefore, they were considered high risks when they resumed residency in Pennsylvania. It's best to phone the governor's info line if you have questions about insurance (particularly if you're leaving the state/country for extended periods and are unsure as to how this will affect you). The local number is 565-5020 (the people there are really quite helpful and friendly). Thanks to everyone who helped me with this insurance stuff. I received a lot of sound advice. Perhaps the most amazing mail message came from someone who offered to investigate adding me to his policy if doing so would help my predicament. What a wonderful gesture and it dumbfounded me that someone was so willing to help... Cool! Here's that collection of replies... -*- -*- -*- Date: Thu, 06 May 93 14:38:32 EDT Subject: auto insurance i sold my car in april because i was leaving the country for 5 mo. and it was old. i bought a new car in october and was treated by my former insurance company as a former customer. they gave me comparable rates (slightly higher because the car is new) but i recall that it was important that i had been insured by them within the last 6 mo. or year or something. my insurance company is Amica. hope this helps somehow... -*- -*- -*- Date: Thu, 06 May 93 11:35:51 EDT Subject: Car Insurance Policies Sorry I can't give you any information, but having done a similar thing, quite a few months ago, I'd really like to know what you turn up. If I'm going to be high-risk the next time I get a car/insurance, it's going to be a lot longer before that time comes! -*- -*- -*- Date: Thu, 06 May 93 13:55:03 EDT Subject: Re: Verify this absurd car insurance law one place to start looking into this claim is the governor's office: 1-800-932-0784. they should be able to refer you to the appropriate state agency responsible for enforcement of such a regulation, possibly the state insurance department. that agency should be able to inform you whether the regulation originated with them or with the state legislature, and whether or not there are any provisions for exemption in cases like your present situation. finally your state legislator is the one most likely to be responsive to your dissatisfaction with any of what you learn along the way in offering whatever relief might be possible and/or appropriate. perhaps there is oe should be some form of very low cost automotive liability for licensed drivers who do not own their own cars. i assume you are not planning to surrrender your drivers license as well. good luck, it will be interesting to hear what you learn, -*- -*- -*- Date: Thu, 06 May 93 13:54:00 EDT Subject: Re: Verify this absurd car insurance law >I was told that if I cancel the policy at any time, I have only >30 days to purchase a new car...after that period, my next car >insurance purchase would automatically be assumed into the "high >risk" category because I would be unable to prove having had thirty days? i was told (five years ago) that it was TWO days, in which you could allow a lapse in insurance, after which it would be as if you had never purchased insurance previously. sounds like the time frame might deserve more investigation, but the general idea of losing your history after an amount of time is definitely valid. -*- -*- -*- Date: Thu, 06 May 93 14:14:33 EDT Subject: Re: Verify this absurd car insurance law When I got my car (after being carless for 3+ years), I fell into the same catagory. I complained, but they said there was nothing that they could do (even though I had 6-7 years of good driving experience before I got rid of my first 2nd.) However, what I was told was that the insurance companies are playing a game. It seems that they wanted to raise rates in PA, and the state govennment said "no way." So the insurance companies said "fine, we're not going to insure anyone new." The state govenment forced them to guarentee all motorists insurance, but could only do so at the high risk rate. Which the insurance companies agreed to (why not, they make beau coup bucks this way.) Now, what I was told might be false, but as I remember the timing, it sounds about right. However, the other thing the agents neglect to mention is that most companies will reinsure you at a lower rate 6-12 months after you've been on high risk. So, if you plan on not having a car for more than 2 years, forget the phantom car, pay the high risk, and switch insurance companies the 2nd year you are insured. Also, invest in a AAA membership, because they can usually find you the best insurance deal in town (they saved me more than $500/year over the most competitive bid I got by calling around -- but the deal was only available to AAA members.) -*- -*- -*- Date: Thu, 06 May 93 14:16:43 EDT Subject: Re: Verify this absurd car insurance law This was true in Indiana as well. Basically when you go to get insurance, one of the first questions is "With whom are you currently insured?". If you have not been insured within last 30 days, you will be high risk. In Indiana you would be high risk for 1 year. (I circumvented this by getting high risk for one month, then called a second insurance company.....when they asked "With whom are you insured?", I gave them the high risk policy company name. Lucky for me they did not notice that I had been with that company for only one month.) I was told the reason for this policy is that people who don't drive for a while, tend to have a higher rate of accidents. By paying for insurance during the period which you do not drive defeats this, but may be most economical. -*- -*- -*- Date: Thu, 06 May 93 14:38:32 EDT Subject: auto insurance i sold my car in april because i was leaving the country for 5 mo. and it was old. i bought a new car in october and was treated by my former insurance company as a former customer. they gave me comparable rates (slightly higher because the car is new) but i recall that it was important that i had been insured by them within the last 6 mo. or year or something. my insurance company is Amica. hope this helps somehow... -*- -*- -*- Date: Thu, 06 May 93 14:41:00 EDT Subject: Re: Verify this absurd car insurance law I had a similar experience about two years ago. I was leaving the country for a year, so I decided to sell my car and buy a new one upon return. My insurance agent (Craig Evans of State Farm) basically gave me the same story that your agent gave you. He said that there really wasn't much that could be done about it. I didn't really have time to pursue the matter so I opted to pay (a reduced rate) insurance premium during the time that I was away. I guess my experience doesn't really help you at all, other than to let you know that there are other insurance carriers who claim the same story as yours. -*- -*- -*- Date: Thu, 06 May 93 12:36:56 EDT Subject: Re: Verify this absurd car insurance law I haven't had a car in many years, thanks to the crazy insurance fools around here. I've never been sure what's really a "law" or what's just them making things up... I was told pretty much the same thing five years ago -- that if you don't have insurance when you get insurance that they can put you in "assigned risk" and make you pay through the nose... I also had them try to pull other crap on me [sometimes sucessfully] like claim I was an "inexperienced" driver because I'd only had a license in PA for 2 years, despite having a license for 7 years before coming to PA! Good luck. -*- -*- -*- Date: Thu, 06 May 93 14:51:12 EDT Subject: Verify this absurd car insurance law I've heard of this. When I got insurance, the important question was: Have you had insurance continuously for the past 3 years. I think this stems from the fact that since they are unable to discriminate based on factors which might decide how bad of a risk you are, they are VERY ambitious to toss you into a high risk category by default. If there is a magical way to avoid this stupid law, I'd like to hear about it. -*- -*- -*- Date: Thu, 06 May 93 15:13:26 EDT Subject: Re: Verify this absurd car insurance law Here's a suggestion: get yourself added to someone else's insurance. Then you will have continuing coverage without owning or actually driving a car. This kind of bullshit infuriates me so much that I am tempted to offer to add you to the insurance we have, if such a move works and is risk free for us. Tell you what, if Nationwide says this will work, and you can't find anyone else to do it with, get back to me and I'll ask my wife and our insurance company. -*- -*- -*- Date: Thu, 06 May 93 14:52:39 EDT Subject: Re: Verify this absurd car insurance law I don't know if this is a law per se, but I've certainly seen it as the de facto behavior of insurance companies for some time. I know lots of people who have had to endure the indignity (and expense) of going to a high-risk pool kind of insurance situation when buying a car after not owning one for a while. After a year or so of doing your "penance", you seem to have bought your way back to good public standing, and you can once again hold your head up high in polite company as you announce to all your friends that you have insurance from a non-pariah company. -*- -*- -*- Date: Thu, 06 May 93 17:31:01 EDT Subject: Re: Verify this absurd car insurance law I did read an article a few weeks ago in either In Pittsburgh or City Paper where the writer was in a similar predicament. (Went without a car for a year; then found themselves in the high risk pool; and was told that one solution was to stay insured without a car.) I don't know what the law actually says, but it does sound like the insurance situation in PA is rather ridiculous. Though, it does raise some interesting thoughts: does it work the other way around? Could I, who've never had a car but may get one someday, take out a 'high risk' policy on no car (at presumably reduced rates), go a year with no accidents or tickets (easy enough to do when you're not driving) and end up in the 'safe drivers' pool when I actually get a car, unlike the folks who didn't bother with insurance until they were driving something? Would there be a net savings in premiums paid? (I would guess not, since these things never seem to work out for your benefit, but it is an interesting possible implication to consider....) -*- -*- -*- Date: Thu, 06 May 93 17:44:00 EDT Subject: Re: Verify this absurd car insurance law You should definitely check with the Superintendent of Insurance of the state of PA, or whatever name it may be called - there is a state-level supervision of insurance, which you can find in the blue pages of the phone book. -*- -*- -*- Date: Thu, 06 May 93 17:48:49 EDT Subject: Re: Verify this absurd car insurance law Hi, I just bought a car last November. My first car here in the States. Since I hadn't had a license for three years, there was no way I could avoid ending up in the high risk group. Therefore, I decided to have the car registered under my girlfriend's name (she is American). Since she sold her last car about 3 years ago, we had the same problem as you are talking about. The solution is to shop around and ask different insurance companies under which conditions they would be willing to insure you. We ended up using Horace Mann/Teachers insurance. If you are a graduate student and you tell them that you are actually teaching (as a TA for instance), they will give you a good deal. We pay $630/year for our Ford Taurus; this includes collision damage, theft, under insured motorist etc.: about everything. I don't have the name of the agent with me right now, but I can check it for you, just send me mail. See you, -*- -*- -*- Date: Thu, 06 May 93 18:34:05 EDT Subject: Re: Verify this absurd car insurance law I can only verify that this didn't used to be a problem. Good luck, and let us all know the facts when you find them. -*- -*- -*- Date: Thu, 06 May 93 23:56:59 EDT Subject: Re: Verify this absurd car insurance law Why not call a few other agents? You owe nothing to Nationwide, and a call is free. -*- -*- -*- Date: Fri, 07 May 93 10:12:32 EDT Subject: Re: Verify this absurd car insurance law Oh yes, it`s true.... Sad to say the idiots in this state decided that if you are car-less or insurance-less for 30 days, then you are akin to a teenager with a license. You are HIGH RISK....*sigh* I had the same problem when I moved from Floriday 6 years ago. The High Risk pool was a PA thing even back then. Suggestion: Call the PA Insurance Commisioner. This office is designed to be a public advocate for insurance fairness. The office is charged with serving _you_ at no charge for just this sort of thing. -*- -*- -*- Date: Fri, 07 May 93 10:22:37 EDT Subject: Re: Verify this absurd car insurance law I've been told the same thing. There are even worse things, though: - Get 2 tickets on your record and you are in "high" risk. - Move from out of state, and if your out-of-state insurance company does not provide insurance in PA, then you are in "high" risk. (because you have to switch companies). - Not only do you have to have yourself covered, but also all other people living at your address that can drive (even if you only have one car and drive it all the time and never let the others use your car). I'm think this means other non-insured (e.g. not car owners) drivers. The real pisser to all of this is that it hurts the people most who don't have money, because they can't afford the high premiums to get a car, and most likely didn't buy another car because they were low on $$. So what's the fairness of paying (even the lowest is probably several hundred $$ a year) money if you don't have any to start with! -*- -*- -*- Date: Thu, 06 May 93 11:49:26 EDT Subject: Car Insurance My only suggestion would be to call the State Insurance Commission. How could you possibly be expected to pay insurance on a car you no longer have? I I would imagine, however, you would have to transfer title from you to Good Will to get yourself off the hook (and put them on it!). Just a guess. But I would definitely call the Insurance Commission. -*- -*- -*- Date: Fri, 07 May 93 16:48:47 EDT Subject: Re: Verify this absurd car insurance law Our experience was similar in Texas when we returned from Germany. My wife has more direct knowledge since the task fell to (on?) her while I completed my assignment in Germany. The story in Texas is the same "high risk premiums without proof of insurance for last three years." We discussed this with our Pennsylvania agent, he also referenced New Jersey as an even worse example. I don't think it's the law, but a response by the insurance companies to a law which prohibits companies from denying coverage. It is unfortunate that a clean driving record is only verifiable through your insurance carrier. You can't prove you've had no claims unless you have insurance on which not to claim. Of course, if you pay all your own damages and avoid be ticketed for moving violations, then you get low rates as well. It's not your risk to society but your risk to the insurance carrier that is their concern. -*- -*- -*- Date: Sun, 09 May 93 12:20:30 EDT Subject: Verify this absurd car insurance law West Penn AAA would be a relatively unbiased source of information about this. I know I had difficulty when I came back to the US in 1989, even though I had been living out of the country. I could only get car insurance via AAA, because other companies would have considered me "high-risk". -*- -*- -*- Date: Mon, 17 May 93 08:02:17 EDT Subject: Re: Followup to "Verify this absurd car insurance law" [much text deleted] |> -*- -*- -*- |> Date: Fri, 07 May 93 16:48:47 EDT |> Subject: Re: Verify this absurd car insurance law |> |> Our experience was similar in Texas when we returned from Germany. My wife has |> more direct knowledge since the task fell to (on?) her while I completed my |> assignment in Germany. The story in Texas is the same "high risk premiums |> without proof of insurance for last three years." We discussed this with our |> Pennsylvania agent, he also referenced New Jersey as an even worse example. |> |> I don't think it's the law, but a response by the insurance companies to a law |> which prohibits companies from denying coverage. It is unfortunate that a |> clean driving record is only verifiable through your insurance carrier. You |> can't prove you've had no claims unless you have insurance on which not to |> claim. Of course, if you pay all your own damages and avoid be ticketed for |> moving violations, then you get low rates as well. It's not your risk to |> society but your risk to the insurance carrier that is their concern. |> The power of the insurance companies is absolutely amazing to me. In order to guarantee their high profits, they will paralyze businesses by increasing their rates or refusing them coverage at reasonable prices. Despite Casey, the insurance companies are basically unchecked. When we moved back to PA from MD in April of 89, I tried to get car insurance with Erie (the folks who had insured my car in PA prior to going to MD). They were also my carrier in MD. They didn't want my business. They claimed that they were "separate companies". I avoided "high-risk" only because the agent I found (after MUCH searching), gave me a small break. I had had one at fault accident in MD (a chain reaction collision w/ no injuries). All the companies wanted to make me high risk. Now, in both MD and PA, your record is expunged after three years. However, the insurance companies want clean records for 5 years before they'll cut your rates. To me, that's unethical and immoral. |> |> -*- -*- -*- |> Date: Sun, 09 May 93 12:20:30 EDT |> Subject: Verify this absurd car insurance law |> |> West Penn AAA would be a relatively unbiased source of information |> about this. I know I had difficulty when I came back to the US in |> 1989, even though I had been living out of the country. I could only |> get car insurance via AAA, because other companies would have |> considered me "high-risk". That's interesting. AAA's skirts aren't exactly lily-white, either. If you ever try to buy a car through one of their dealer programs, you'll find out.