State Farm -"You're Fired!"

[Jake]

Insurance experts, please weigh in - for I'm sure I overreacted (and would gleefully do so again).

 

State Farm e-mailed me stating that they routinely receive information on licensed drivers from each state. They learned that our daughter is a "youthful driver" defined as a driver under the age of 25. They are correct. Our daughter is in fact youthful, and is a licensed driver, and has been for 3 years. (The fact that she is a student living car-less in Boston a thousand miles away from my keys is immaterial.) State Farm says that unless I provide them with the full policies showing that my youthful driver is covered by another company they will be forced to raise my motorcycle premiums. How nice of them. Just trying to save me money. Very nice. Merry Christmas.

 

So, I started to think this one through. The more I ruminated, the more indignant I became. My daughter is not their client, only I am. My cars are not insured through them, only my motorcycles are. She does not ride my motorcycles, only I do. I mean, I gave this thing a whole 3 minutes or so before acting. The only potential financial risk to State Farm is if my daughter decided to ride my motorcycles and cause damage and I proceeded to file a fraudulent claim stating that I was the rider. She cannot file a claim as she is not the insured. If she were to cause bodily harm, State Farm would never hear from me as they have no liability and would provide no coverage.

 

So, the simple truth is that State Farm is charging me a "you might lie to us" premium. Do the actuarial tables show that motorcycle fraud from old guys occurs with greater regularity in households containing a youthful driver? Of course, I could simply fork over the USAA policies to State Farm evidencing my daughter's coverage on our autos, but it sure does not feel right to do so. State Farm is not a party to the information on those contracts, and I'm not about to help their data-crunching team analyze the competition. No claims, long time customer.

 

So, I fired them.

 

Was I justified or did I err by channeling my inner Trump? Go ahead, I can take it.

[Danny caddyshack Noonan]

I'm guessing they see their exposure as managing the risk you state with the exception that you don't need to file a fraudulent claim. You are the R.O. and bear some liability, as do they as the insurer, for unauthorized operation. After all, this is the united states of litigiousness. (hope I spelled that mouthful right)

[Glenn Reed]

Jake,

 

I absolutely understand and would have done the same.

 

However, I do know of an example of an adult rider whose adopted son decided to take Dad's bike for a ride (without permission or license) and wrecked it. I have no idea whether said adult filed a claim or not. I do believe that the coverage follows the vehicle, so if the collision had resulted in injury to another person, damage to another vehicle or property, his insurance would have been on the hook nonetheless. There might be enough actuarial basis for them to believe this is an issue, and try to protect themselves from it.

[Jake]

OK, help me out with the unauthorized operation exposure part. In a non-fraudulent scenario, what is an insurance company's exposure if a non-insured party goes for a joy ride?

 

Believe me, I know lawyers can (and do) sue anyone at anytime for any allegation, substantiated or not, but I am referring to the substantiated scenario. Are insurance companies routinely found liable for unauthorized operation of vehicles they insure?

[DJ_Fission]

I don't know a lot about the technicalities of insurance, but if I may ask a question:

 

I'm curious why you don't insure your motorcycle with the same company as your car? I know that I get a multi-policy discount for doing that with my insurance company.

 

Of course, this question adds nothing to the conversation, so please feel free to ignore it.

[Jake]

Happy to answer. Florida is a surreal place for insurance and little of the pricing makes sense at the surface of it (huge U/I premiums). My cars are with USAA, but they pass through motorcycle policies to Progressive down here and they are exorbitantly expensive.

 

State Farm has until now been a pleasure to deal with and is priced, ahem, fairly for here. If this is really an unauthorized operation issue they didn't explain that at all. I could share the e-mails (but won't). It was like "give us your external policies or else". That kind of customer service just isn't my tempo.

 

 

[marcopolo]

Did you actually talk to someone at State Farm (so they could, hopefully, provide a reasonable explanation) before "firing" them?

[greiffster]

Jake,

I think Glenn is on to something with the policy following the vehicle, not the driver. State Farm probably assumes some risk if she could jump on the bike and take off, even though not on the policy. After all, kids (not yours or mine ) do stupid things.

 

Why not just send them the USAA policy stuff?

[Marty Hill]

Jake, shop around and find a better deal. Sadly most ins. co's tend to inflate the bill after you've been with them awhile. Dairyland charges me less than half of what I was paying with another ins. co. I love USAA but they go up every year on my car. Must be the old age tax.

[Skywagon]

What Marty said...I was with progressive for about 10 years....up up up ...called several providers, chose allstate with better coverage for significantly less dollars. Allstate was same for 3 years, went up a fraction this year, will shop again in June. Allstate had a first year deal for take away's from other insurance companies.

[Glenn Reed]

I think Glenn is on to something

 

Well to quote Ray from Tin Cup - "That's hardly ever been the case."

[Glenn Reed]

OK, help me out with the unauthorized operation exposure part. In a non-fraudulent scenario, what is an insurance company's exposure if a non-insured party goes for a joy ride?

 

Believe me, I know lawyers can (and do) sue anyone at anytime for any allegation, substantiated or not, but I am referring to the substantiated scenario. Are insurance companies routinely found liable for unauthorized operation of vehicles they insure?

 

I'm sure that there are members on here who can represent the industry better than I can, as just a consumer, but you're stuck with me for now.

 

There are a few scenarios:

 

1) The named insured gets involved in a collision - they cover according to the policy agreed upon.

 

2) The named insured loans the vehicle to someone (friend, test rider, some idiot they met on the internet and rode somewhere to visit with) and said individual has a collision. The insurance company still covers it because the insurance follows the vehicle.

 

3) The vehicle gets stolen, and an "unauthorized driver" is at the controls when a collision happens. Well DAMHIK, but the other person's Uninsured Motorist Coverage kicks in, and that's what covers their damages. If it hit them, or their house, well, I don't know.

 

So we're looking at another scenario here, someone not on the policy, but not "authorized" as in scenario #2, but not quite "stolen" as in scenario #3, manages to ride away on your bike and cause damage to someone else's person or property, as well as the bike.

 

I'm guessing (stress on "guessing" that there is precedent that this is still their problem/financial responsibility. Thus, the actuarial geeks have figured out a formula where their possible risks are covered across the totality of their covered vehicles, and they mitigate this risk by imposing an additional premium, or asking for the documentation for someone else they can shift the financial burden to.

 

Either that or they just wanted to piss you off because you just kept paying your premium on time and they couldn't figure out any other way to get more money out of you.

 

Hi Jake .

 

Glenn

[StuGotz]

In CA we have UI, which is uninsured motorist coverage. Prob covers all that you describe. But good on you for changing carriers.

 

MB>

[DaveTheAffable]

If you are claiming her as a dependant under your roof... Even if she is at school, they want to see coverage.

 

Insurance companies sue each other under deep pockets mentality. If she was in an accident in one of your cars and DIDNT have coverage, the other parties insurance would start looking at any other 'vehicle' coverage in the home to come after. Or, homeowners, or any other thing they can glump onto. They are simply trying to minimize their risk.

 

[tallman]

And for comparison, Allstate does our multiple cars, but more expensive than Progressive for the GT.

And despite multiple vehcile policy and "bundle" discounts, cheaper to have home insurance with another company.

(We went thru 4 carriers for home in @ 6 mos. after Dennis and a roof "claim" that resulted in no cost to carrier due to hurricane deductible rip off).

 

Insurance coverage is fun to compare.

 

[Twisties]

I would have shopped around. It's always a good idea to shop insurance every few years.

[Jake]

Did you actually talk to someone

 

I violated my own rule by not picking up the heavy phone - so this is on point. I am sure our misunderstandings would have been ironed out through a reasonable phone call.

 

I was predisposed to mistrust them, I suppose. It started with how they began the communication (arguing through e-mail with my wife) which did not improve upon my inquiry, and I do recall Marty's point about how insurance companies raise your rates betting that you won't switch - that was discussed on this forum some time back. Yes, my tolerance was not up to par, hence my outreach/confessional here.

 

Thanks Glen - all of that makes sense. And to your last point, they succeeded!

 

Still, after talking with a few moto friends in the office with a similar multi insurance situations, and looking at replies here - it still does not seem that this practice has happened to others. So, seeds of doubt remain as to their motive.

 

Profit margins in Corporate America are very thin these days, and consumers put a premium on service. When we added a car recently to our USAA policy the representative was astute enough to notice that we don't put many miles on our convertible. He asked if we store it, which we do. So, he saved us a bunch of money by implementing a storage policy - all we need to do is call them and they flip it over to regular coverage when we drive it. A simple phone call. Nice. That's how I want my insurance company to run.

 

So, time to shop moto insurance once again. I'll be looking for the new company rep to ask if my youthful driver is covered somewhere else. If they don't ask, well, then my State Farm trigger finger will feel a little bit justified. If they do ask, then I was wr, wro.., wong... (just can't say it).

[Glenn Reed]

If they do ask, then I was wr, wro.., wong... (just can't say it).

 

Channeling your inner Fonzie I see.

[elkroeger]

I thought I was wrong once, but I was mistaken....

 

Insurance is a black box to me. I put my money in, and somebody's kid, somewhere, goes to college.

 

I think you're right. They basically called you a liar, and used that to raise your rates. I got a neighbor with a Harley. You gonna raise my rates too? Go fly a kite.

 

Incidentally, I've had usaa for ages, and they sent me to progressive for the bikes. Happy so far, I guess. At least they haven't called up and asked about my neighbor...

 

 

[Matts_12GS]

Happy to answer. Florida is a surreal place for insurance and little of the pricing makes sense at the surface of it (huge U/I premiums). My cars are with USAA, but they pass through motorcycle policies to Progressive down here and they are exorbitantly expensive.

 

State Farm has until now been a pleasure to deal with and is priced, ahem, fairly for here. If this is really an unauthorized operation issue they didn't explain that at all. I could share the e-mails (but won't). It was like "give us your external policies or else". That kind of customer service just isn't my tempo.

 

 

funny, in both Jacksonville, and now here in Austin Progressive was cheaper to insure my bikes than anyone. Since USAA passed it through, I kept my standing policy so I didn't have to do any new paperwork.

[enfoman]

Umm Jake...

I am guessing that S.F. is actually making sure that they are making sure that you are covered for "this" When you were actually covered for "that" as they advertised or else they maybe sued for false advertisement.

Either way, at least here in NY, it wouldn't matter much with whoever you insure with. Your under aged driver daughter would be on your policy unless you can prove that she in fact is independent and resides elsewhere. That has been my experience anyway.

I believe that would be written in the policy somewhere. When in doubt, always review what is written in the policy first before deciding to take action with the agent or company.

[szurszewski]

Umm Jake...

I am guessing that S.F. is actually making sure that they are making sure that you are covered for "this" When you were actually covered for "that" as they advertised or else they maybe sued for false advertisement.

 

Nah - SF can go ahead and do that - those are Farmers Ins. commercials

[enfoman]

I stand corrected. Thanks for catching my misinformation.

[Dave McReynolds]

I'm not sure why a company couldn't exclude a particular person or persons from coverage under a policy, but due to the common law issues that have been previously identified, it would probably take statutory law changes to effect. The insurance companies have nothing to gain by lobbying for such a change; it would just make their lives more complicated, and probably less profitable. So that leaves the poor parents of teenagers, not a very vocal or organized group to start with, and one that is transitory at best (or worst) as children hopefully don't remain teenagers forever.

[Shaman97]

Our car insurance company (Mercury) excluded our kids in the policy when they lived at our house in order to keep our rates down. Once they moved out, the exclusion was lifted.

[tallman]

 

[Indy Dave]

When we added a car recently to our USAA policy the representative was astute enough to notice that we don't put many miles on our convertible. He asked if we store it, which we do. So, he saved us a bunch of money by implementing a storage policy - all we need to do is call them and they flip it over to regular coverage when we drive it. A simple phone call. Nice. That's how I want my insurance company to run.

 

So, time to shop moto insurance once again. I'll be looking for the new company rep to ask if my youthful driver is covered somewhere else. If they don't ask, well, then my State Farm trigger finger will feel a little bit justified. If they do ask, then I was wr, wro.., wong... (just can't say it).

 

You and I are on the same page here, Jake. I would have told them to pound sand as well. My wife, on the other hand, would probably have said "what's the big deal" and sent what they wanted along with everyone's Social for good measure. And that's what makes our life so....interesting. But I digress.

 

I have 3 cars and my bike with SF and the wife has her car with another carrier - we haven't combined coverage yet because she keeps getting rear ended while stopped at a light. (Twice in the last year alone) Two of my cars are seldom driven and I have them on reduced millage. Recently, SF wanted the odometer reading of one of the cars and if I didn't get it to them, they would charge me the 'normal' rate. We were moving at the time and I had the car stored in another town. Before I got them the reading, they jumped the rate, effective the next premium due. I'm one guy with 3 cars and a bike . . . how many miles could I possibly put on each one? I'm sure now that they have the info, they'll revert to the old rate. But it ticked me off that they acted so quickly to raise the rate. And like you - how much nicer it would have been for them to recommend a storage policy for both of the cars that sit most all Winter and hardly get driven in the Summer. I've been with SF for probably 15 years . . . time for a change!

 

Happy New Year.

 

 

[Jake]

That's because your wife is the true Angel in the family, while you and I, my friend, are grinches!

 

State Farm called and they apologized, stating they "went to bat for me" whatever that means. I did not ask for any leniency/discounts/concessions, only for them to explain why they needed what they asked for. They did not and have not.

 

I want to let State Farm out of the box here. I don't mean to poke at them in our public little neighborhood (even though that's exactly what I did in frustration). I'm sorry. I'm a bad person. This scenario could have occurred at most any insurance company (well, not USAA). Other than this hiccup they've been professional and responsive.

 

And fired.

 

 

[Glenn Reed]

Other than this hiccup they've been professional and responsive.

 

And fired.

 

 

[Indy Dave]

I 'spect I am at that. I probably resist change more than I should. I don't like lodging establishments copying my drivers license for any of their staff to access at any time. I don't play well when extra verification and copies of my I D's and sharing my personal information ad nauseum is expected when the need for such information is unclear, trivial or questionable. (In the case of insurance, they already have most of my vitals - certainly more than I think they should have).

 

There was a time when insurance companies didn't find a reason to to charge you for under-insured motorist and uninsured motorist. It was simply included in your rate.

 

My default setting leans toward skepticism on most things that involve money. My recent dealings with insurance companies have only served to justify and reinforce that. We had hail damage from a storm two years back. It affected our entire neighborhood! I had 2 people come out to look at our roof before calling the insurance company. They sent the adjuster and he said just our gutters and deck(!!) were damaged. I had another guy come out and mark the areas. I called back the insurance company and they warned me that if they sent out another adjuster and he didn't find additional damage, they would increase our rate! WTF!! There's no doubt that many homeowners are intimated enough by that threat that they just go along. Long story short - we got a new roof too. But getting paid for it was quite a hassle too. So much so, that I want to change carriers. But guess what - if you've had a claim within 2 years, most other companies won't take you without a surcharge.

 

And why yes, we did get a rate increase after that. When the two years are up, we will be changing our homeowners. Two years isn't long enough to make me forget the sting of dealing with them.

 

I'll save everyone the rant on the issues and slime balls we've had to deal with when my wife has been rear ended and her car undrivable. But it was more of the same.