Select Insurance tip of the day….
Look at the cars on your insurance policy. Do you own all the cars that are listed meaning the title is in your name or in the name of your spouse? If they are….. good for you! If any of the cars are owned by anyone else like your son, daughter, niece, parent, grand parent, friend, etc. – then keep reading!
Some people innocently transfer the title of a car they own to someone else without making a formal change to their policy and they continue to pay the cost of the insurance. Sounds like a very nice thing to do, right? Well, if you didn’t change your insurance policy to reflect the new owner, there is now a huge gap in coverage!
Why can’t you insure a car you don’t own?
Many people don’t realize that paying for insurance isn’t a guarantee that coverage will be there at the time of a claim. Why? In this example, it is because legally a person can not insure property they do not own. It doesn’t matter if the person paying for the insurance is the (parent, grand parent, aunt, uncle, etc.) to the titleholder of the auto The rule is “you must have an insurance interest” to the property being insured; being nice and helping someone out isn’t enough. If this applies to you or you know someone who is insuring a vehicle they don’t own…. don’t let this go unattended.
I pay for the insurance – so, why can’t I insure a car I don’t own?
If you had an accident and the insurance company learned the car is not owned by you, the insurance company can deny coverage and refund the money paid for the insurance leaving the person who owns the auto in the cold with no insurance. This would force them to pay the claim out-of-pocket not to mention they would be in non-compliance with State of Ohio insurance requirement.
We see this situation more times than you would imagine. There is a simple way to close and avoid the gap in coverage. Simply, call your insurance agent, preferably prior to making the title change, so they can offer advice and let you know of any difference in cost. Closing the gap will provide you and the titleholder peace-of-mind to know there will be coverage at the time of a claim.
Watch for our next blog …
Our next blog will explain the difference between a “Named Insured” (YOU) vs. a listed “Driver”.
Who is Select Insurance Services…
Select Insurance agents have the heart of a teacher educating clients as they press through life’s cycles which impact their insurance need. If you aren’t a client yet, give us a call and let’s see how we close gaps and improve your insurance plan…1-440-237-8555 or Contact Us