I haven't been on for a few days, but I wanted to post some information that might set things straight on another closed thread that got somewhat heated. I used to be an insurance adjuster.

The issue was someone wanting a photo from another member of a car that looked like his, so that he could submit it to his insurance company, to conceal the fact that the interior was not done, and the car was caged. REALLY BAD IDEA!

The insurance concept you were all looking for is called Material Mis-Representation. In laymans terms, the insurance company makes its underwriting judgements on whether to insure you based on facts you submit to them. If you knowingly misrepresent those facts, and they find out, they may assert that the omitted facts would have altered their underwriting decision. This could be for your driving record, the car, your claims history etc. etc.

The law varies from state to state, but how it works in most places is this . . . if the insurance company prevails in the action, they can refund you any premium paid, and legally it is as if the policy never existed. This usually comes to the companies attention after you have had to file a claim. In this case lets say the car was wrecked, the adjuster is obviously going to see the cage, and the photo submitted to underwriting has not only no cage, but is another car (yep, all that stuff lives forever in the underwriting files) All the sudden things look really ugly.

Unfortunately, this is when the insured starts yelling the company is out to shaft him. The reality is your adjuster is just another guy doing his job. The contract of Insurance (that thing you know as a policy) is a legal contract, and sticking you for the cost of a car is not worth my adjusters license. We pay what is covered in the contract, and move on to the next file. He has 150 files on his desk . . .

Having said all that (and stipulating that I am not an attorney, or your mother) the moral of the story is simple. If you look hard enough you can find a carrier to insure anything and anyone. Something considered high risk (and that cage is a red flag) will come with a higher premium, and probably some use exclusions, but it is insurable with all the true facts known. So is it worth it to risk lying.

Consider it this way, Are you willing to risk the assets of both you and your family for a few hundred dollars less premium a year? Accidentally roll and stop sign and kill someone . . . what would a multi-million dollar judgement against you do to your life? Don't think it can happen? Ask any adjuster, do the job long enough and you see it happen first hand. Over, and over, and . . . .

Ok, soap box closed, thanks for listening.

 

Very well put.

 

So what would happen if that driver ran into my car and I file a claim? Does my insurance cover my loss and then sue him? PG.

 

Boatmark,

A voice of common sense. In my case the photos are taken by an independent third party (appraiser) approved by the insurance company. Those pics and his/her detailed report on the condition of the car and possible market value are used for "agreed value" purposes. There are those who poo-poo appraisals, and their accuracy, but they do serve as a benchmark that I, the appraiser, and the insurance company agree to. The key word is "agree": I or the company can disagree on the value of the vehicle and ask for a re-assessment based on points of contention. Under these circumstances there is no room for misrepresentation and dispute in case of total loss.

 

Boatmark,
Excellent polite reply full of GOOD advice !!!!! I again LOVE this Forum; it can also help keep us from making Dumb decisions.
Like my older sister taught me " Karma" what goes arround comes arround . If you try to mis- represent to your Insurance people it will come right back arround and BITE you hard on the BUTT. Good advice you posted here Thank you for your expertise
in dealing with this.

 

Nice post and good info, but it turns out Vinny was building the car to race as you can see on this Vega forum. Post #4 says it all.

http://forums.h-body.org/viewtopic.php?f=1&t=26080

 

As a former insurance broker (in my first life many decades ago) this is an excellent post. Thanks for taking the time to put it together. I'm sure you frequently get an earful from people who have no idea what they're actually insured for but only find out the hard way, after a claim.

 

I appreciate the positive responses everyone.

I am not much good at cut and paste, so I will try to respond to some of the questions raised using the screen names.

- - - Paul74ttop wanted to know about if the guy in my example hit him.
Yes, your own insurance would pay for your car, and your insurance company would then go after the guy who hit you (if he is insured then his insurance policy). You would unfortunatly be out your deductible. This is called subrogation, where the company trys to recover money paid for losses they believe were caused by negligence of the other party. You generally have a requirement under your policy to assist in this process. In a small case maybe just providing documentation etc, or in a large loss maybe even depositions or testimony. One added benefit is that if they recover 100% of the money they usually give you 100% of your deductible back. Some even give you a percentage if they recover a precentage.

However what they do is a business decision. You have to understand that to sue someone, or the other carrier, costs give or take 5k to argue, and another 6-8 to go to trial. Most subro is wheeling and dealing by adjuster between insurance companies. It becomes a business decision not to fight very long over 3k, and much just gets eaten . . . but you lose your deductible. But spending 5k to recover two is just bad business. The key to this question is negligence. In most accidents both parties are at fault to some extent, so each carrier pays his guy and moves on.

- - Paul74 brings up a very very good point about appraisals
This gives you and the carrier an unbiased third party document to work from. Some carriers will even insist on it for something way out of the ordinary. This is actually what I did for a living in the Yachting industry after I left the insurance company. If the appraiser knows his stuff, then the value should be in the ballpark. Close enough that you can reach an agreement with the company. But everyone has to be reasonable. A car is worth what the market will bear. But we all know they are not often worth what we have in them, or what one guy gets at Barrett-Jackson. Bottom line, a good third party appraisal is well worth the money.

- - DZRick points out that the case I was talking about was really meant to be a race car.
Well, this may be its primary use, but if it was not going to be tagged for the street, he wouldn't be having this discussion. And as they say . . . boys will be boys. My same accessment applies. Tell them the truth. They write a policy for the true natue of the car, with an exclusion of coverage once it is on the event grounds, and a big exclusion of coverage for any "exhibition of speed, or speed contests" on a public highway. Follow the rules, and everyone is covered.

For the record, and am not trying to preach good behavior to anyone. I have put my dealer numbers on my raceboat and run 140mph past peoples backyards waaay too many times in my youth to preach to anyone. Gawd . . . I cannot believe some of the s**t we used to do. And with the sponsor name down the sides no less . . . . ah youth.

Two final notes - - -
First, alot of the cars we have are best served by an "agreed value policy". This is not the same as a "stated value policy". You want agreed. This pays a total loss of an agreed number, whereas the stated pays market value up to a stated value. As an ex-broker maybe Mike Ward would like to step in here with a short tutorial.

Second, go into your files and really read your insurance policy. Not just your car, but your house etc. Most people never do. Ask questions and understand what you have. The cheapest policy may not be a good value, but most people don't know the difference, so they just look at price.

Many people insure their cars when they buy them, and never think another thing about it. Look at where you need to spend money, and where you can save some. For everyone the choice is different.

Using myself as an example, I carry high coverage limits (300k/500/1mil). As an adjuster I am paranoid about having enough coverage. On the other hand I offset the cost of some of the coverage upgrades with high deductibles. I go with as high as the carrier will allow, usually 1000 or 1500. I am worried about the large loss. I'll carry my own risk for the $900 fender bender. I also look at dropping collision and comp. coverage on low value vehicles. When my truck was worth 30k it was fully covered, but now that it is worth 4k, I can afford to risk losing it.

Finally, I am happy to answer questions as long as you have them, and to the extent of my knowlege. This is something not many people know about, and can potentially hurt them. When it comes time to paint my car the paint professionals on here can answer my questions. The forum is functioning as we hope it would.

 

I was not the one who inquired about what would happen if someone hit him. But it is a complex post so no problem.

I am intrigued about what you call call "high" liability limits of 300k/500k/1M. I carry $2M liability here in Canada with no problem. That is typical in this country. Even with that, hit a young physician and disable him/her (you are at fault) with potential earnings of $200,000/year for the next 30 years and see how far that insurance takes you. Just a thought.

 

Boatmark, I always wondered how amature racers insured themselves. Like what if they are injured on the track?

Paul 74, those doctors are starving in Canada!

 

Paul74 - - Sorry, got you confused there for a second. You are exactly correct in your analysis. Unfortunately down on our side of the border it is common for people to use only minimal 10k/40k/20k minimal coverage. That, and a ham sandwich will at least get you lunch after the accident. I should have pointed out that I have a liablity umbrella on my business (which covers my personal cars as well) that takes me out to 2.5mil if all else fails. People just don't sit and realize the numbers that appear in a scenario you just laid out.
Lesson, more coverage is always better.

SH-60B - - - I don't really have current info, but I can tell you what it was when I was boat racing twenty years ago. Our racing licenses with the American Powerboat Assn. (APBA is our equivalent of NHRA or Nascar) included access to towing insurance for the rig coming and going to an event or test session, and life and disability insurance for while we were racing that was on a group plan through the assn. I don't know what they do for cars, but other than through APBA we couldn't get covered for medical. All the carriers specifically exclude powerboat racing . . . claimed it was the most dangerous form of motorsports. Not sure that was true, but I guess it would have to do with our surviving the crash, then drowning anyway.

I would be curious to hear what the guys who are car racing now can tell us.

 

Interesting. Third-party liability here is set by law as a minimum of $200,000.

 

Great idea, but it's been repeated many times on the forum already, 4-5 times per year at least. There's still those that won't/don't listen, argue the point endlessly and find out the hard way. I'm done beating my head on the wall on this and many other points, but thank you again for taking a stab at it.

 

Very well put, I must have missed the other thread and all I can say is WOW....I have to admit I have never tried to get insurance against stuff that doesn't exist in my car using someone elses photo.

That shows a persons true character if he chose to pull a stunt like that.