Shopping new car Insurance in Tucson? 4 questions your agents should ask.

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It is a new year and some people are making auto policy changes for 2017. I personally added another vehicle to my policy. If you are shopping for new policies here in Tucson, or maybe the Holidays have added a new vehicle to your driveway, here are five questions that your insurance agent should be asking you as you review your policy and coverage’s.

The specifications and minimums for coverage in Arizona are set by the state, particularly as to minimum limits for personal injury protection and uninsured and underinsured motorists coverage.

 

It’s also common for all members of a household to be covered under one policy, for example, mom, dad and teenage drivers. But the policy definition of a “family member” can be tricky, especially with respect to stepchildren and who is “occupying” the same residence. There also may be questions about same-sex spouses or domestic partners who aren’t married.

Here are five things agents and brokers should review with clients who are buying or renewing personal auto policies to help them make the right decisions about coverage:

1. What is a private passenger auto?

While this may seem like a basic question, there are many types of vehicles out there and how you use them can determine the way insurance companies classify and cover them. For example, I just added a vintage 1965 Econoline van to my policy that I am using for my business. In most instances if I were to use that van to make deliveries, it would not be covered under my insurance, however, since I am using it strictly for advertising and transportation, it is covered.

According to the Insurance Services Office “Personal Vehicle Manual,” a personal auto policy may be written to cover private passenger autos with four or more wheels, such as the following:

-Private passenger autos.
– Four-wheel motor vehicles other than a truck type that are either owned or leased under contract for a continuous period of at least six months or more.
– Sport utility vehicles are not specifically mentioned in the ISO manual, but a typical SUV would fall into this category.
– Cars rented to others or used as a public or livery conveyance (for example, a taxicab or a limousine) are not eligible.
– Pickup trucks and vans. These vehicles are also eligible for a personal auto policy as long as they are not used for delivery or transportation of goods or materials, except delivery or transportation for farming or ranching or incidental to the named insured’s business of installing, maintaining or repairing furnishings or equipment.

2. Who is a ‘family member’?

This one also gets complicated with many different family arrangements and blended families especially ones where the adults are not married but they have driving age minors living with them.

Most policies define a family member as a person related to the named insured (or resident spouse) by blood, marriage or adoption. To qualify as a “family member” the relative must reside in the named insured’s household.

This definition becomes especially important when the policy defines an “insured” to include any family member or when it refers to vehicles not listed in the policy but owned by a family member. A ward or a foster child residing in the named insured’s household is also considered a family member.

And what about the family member status of children attending college or serving in the military, or children who move between the homes of their divorced parents? According to the ISO’s “Personal Vehicle Manual,” “a person in active military service with the armed forces of the United States of America is not considered a resident in the applicant’s household unless this person customarily operates the auto.” This statement, like other provisions in the “Personal Vehicle Manual,” may express ISO’s intentions, but it’s not part of the insurance contract.

3. Where does a stepchild actually reside?

Again, things can get tricky with step children of driving age and their place of residence. If this describes your family, then your agent should work to clarify the specific living arrangements of your family and tailor the policy to cover all of you. If a stepchild who is still spending time at the other parent’s home could cause complications in the event of an accident.

Courts in various jurisdictions have determined residency based on the facts presented by each individual case and on state law.

Agents and brokers should consult state insurance laws to determine appropriate coverage in situations where the child lives in a state that is different from the parent’s state of residence. In addition, family law definitions may come into play when households included blended families.

4. Who owns the vehicle?

Insured vehicles may be owned by either an individual or a husband and wife who reside in the same household. Any vehicle that is leased under a written agreement for a continuous period of at least six months qualifies as an owned vehicle.

If the Joint Ownership Coverage endorsement is attached, a personal auto policy can also be used in a situation in which there is a need to cover autos jointly owned by two or more of the following:

Individuals, other than husband and wife, residing in the same household.
Nonresident relatives who jointly own a vehicle together.

These situations might include an adult child who jointly owns a vehicle with a parent or domestic partners who jointly own a vehicle.

So as you can see, living situations and the cars you drive can add a layer of complications that you might not have ever considered. When shopping your auto policy, or if changes are made to your vehicles or family situations, now is the time to re evaluate your coverage.

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