Vehicle Insurance: Name Fraud

Why is there a vehicle insured under my name?

There are several reasons why a vehicle might be insured under your name. Firstly, you may be the owner of the vehicle and have registered and insured it in your name. Alternatively, if you are not the owner, you may have been added to the vehicle owner's insurance policy as an additional interest or named insured, especially if you live at the same address. This is known as permissive use, where the vehicle owner and their insurer allow you to drive the car temporarily, extending their coverage to you. In some cases, you may also be a co-owner or partial owner of the vehicle, with your name added to the car's title, which gives you insurable interest and allows you to insure it.

Furthermore, certain states have specific requirements. For example, in New York, the insurance card and registration must be in the same name. Thus, if you live with the vehicle owner in New York, it is more likely that you will be added to their insurance policy.

Proving insurable interest

In the context of vehicle insurance, proving insurable interest means showing that you have a financial stake in the car. This can be difficult if you are not the owner, as insurance companies may suspect potential fraud. To establish insurable interest, you must convince the insurance provider that you have a vested interest in maintaining the vehicle in good condition. This can be done by explaining your reliance on the vehicle, such as needing it to get to work or school.

Additionally, it's important to note that local laws in some states may prevent you from insuring a vehicle that is not registered in your name. In these cases, you may need to explore alternative options, such as being added to the current policy or obtaining a non-owner insurance policy.

It is always advisable to be transparent and honest with insurance providers to ensure compliance with legal and ethical standards.

Understanding the claims process

An insurance claim is the process of notifying your insurance company that you have been in an accident. The claim starts the process of accessing your benefits so you can cover any damages or injuries you experience.

Intimate the Insurance Company

First, inform the insurance company about the accident on their toll-free number/email as soon as possible. You must submit a duly filled-in claim form and the requisite documents to the insurance company, take your car to the workshop, and get an estimate of the damage to the vehicle. The forms are available on the insurers' websites as well as at their offices.

Vehicle Inspection

The insurance company will send a surveyor to assess the damages. The surveyor will prepare a report and pass it on to the insurer, and you will also receive a copy. Based on the surveyor's report, your car will be sent to the network garage for repairs.

Submit Documents

After the repairs are completed, you will have to give the surveyor the duly signed repair invoice payment receipt and other documents, who will then send them to the insurance company for the claim to be verified.

Cashless Claim

If all the documents are in place, your car will get repaired in the insurer's network garage. The insurance company will then directly settle the claim via cashless claim settlement with the network garage.

Reimbursement Claim

In the case of a reimbursement claim, you can first make the payment to the garage from where you got your car repaired, and the repair amount will be reimbursed to your account based on the terms and conditions of the policy. Remember that the insurance company will only reimburse you if you submit the repair bills and invoices immediately after your car is released from the garage.

Third-Party Claim

The process for a third-party claim is slightly different. If a third party has sent you a legal notice asking for a claim, do not communicate with the party before informing your insurance company. Also, remember not to make any financial commitments or out-of-court settlements before speaking to your insurer first. Submit a copy of the notice to your insurer, along with copies of the RC book of the car, the driving license, and the FIR. The insurer will verify the documents and assess the accident, and if found satisfactory, you will get a lawyer appointed by them. If the Motor Accident Claims Tribunal directs you to pay damages to the third party, the insurance company will directly pay the dues to the third party. The claim amount under a third-party claim depends on the age, profession, and income of the third party.

Stolen Car

If your car has been stolen, first, file a complaint with the police and lodge an FIR. Submit a copy of the FIR to the insurance company. Once you receive the final police report, make a copy of it and submit it to your insurance provider. The insurance company will assign an investigator for further claim-related investigations, so cooperate with the investigator. Wait for the claim to be approved. Once the claim has been approved, submit the RC book of your stolen car to the insurance company. The name of the owner will then be changed to the insurer's name. Submit the duplicate keys of the car, a subrogation letter, and a notarised indemnity on stamp paper to the insurer. Once all the formalities are completed, the insurance company will disburse the claim. The claim amount will be equal to the Insured Declared Value of your vehicle.

State-specific laws

Even in states with mandatory car insurance laws, the specific requirements differ. For instance, while some states only require liability insurance, others mandate additional coverage, such as personal injury protection or uninsured motorist coverage. The minimum coverage limits also vary by state. For example, California requires $15,000 per person and $30,000 per accident in bodily injury insurance, plus $5,000 per accident in property damage insurance. On the other hand, Alabama requires a minimum of $25,000 per person and $50,000 per accident in bodily injury coverage, along with $25,000 in property damage coverage.

Additionally, some states have unique regulations regarding insurance and vehicle ownership. For instance, in New York, the name on the insurance card must match the name on the vehicle registration. This means that if you own the car, you typically need to be the one to insure it. However, there are ways to insure a vehicle that is not in your name, such as by purchasing non-owner car insurance or being added to the existing policy as an additional driver.

Non-owner insurance policies

Non-owner insurance is also beneficial for those who need to file an SR-22 or FR-44 form with their state. These forms may be required to reinstate a driver's license after a serious conviction, such as a DUI. Non-owner insurance can provide proof of coverage in these cases.

It's important to note that non-owner insurance does not cover damages to the vehicle being driven. It only provides liability coverage for injuries to others and property damage caused by the driver. Additionally, non-owner insurance does not cover the policyholder's own injuries in the event of an accident.

The cost of non-owner insurance depends on factors such as age, driving record, and the desired amount of coverage. It is generally cheaper than traditional car insurance, but rates may be high if an SR-22 or FR-44 form is required.

Non-owner insurance is a good option for those who don't own a vehicle but still want the protection and peace of mind that comes with having insurance coverage. It ensures that drivers are financially protected in the event of an accident, even when driving a car that is not their own.

Adding the owner to your policy

Adding the owner of a vehicle to your insurance policy is a way to insure a car that is not in your name. This is a good option if you frequently use a family member's car. However, it is important to note that this can be difficult, as you will need to prove that you have an insurable interest in the vehicle. This means that you must have a financial stake in the car, which can be challenging if you are not the owner. Additionally, the claims process can be complicated if the car is involved in an accident, as the owner may not receive the money from the insurance company.

When adding the owner of the vehicle to your policy, you will need to provide their basic personal information, such as their full name, date of birth, and driver's license number. It is important to be honest with your insurance carrier and provide accurate information. Adding the owner of the vehicle to your policy may increase your premiums, depending on their age and driving history. It is always a good idea to shop around and compare quotes from different insurance companies to find the best rate for your situation.

It is also worth considering other alternatives, such as buying non-owner liability insurance or transferring the title of the vehicle to your name. If you are added to the owner's policy as a driver, you will be covered by their insurance even if you are not listed as the primary driver. This is called "permissive use", and it is important to check with the insurance company to ensure that you are covered.

Frequently asked questions