nick1

my sister has an '07 honda civic, and recently due to some misunderstanding had her insurance canceled. now her rates have gone up dramaticaly. she also lives in toronto which makes insurance more expensive.

i'm considering doing her a favour by transfering the car into my name, and insuring it in kitchener to allow her to save some cash. here are the main questions i have..

can we transfer the car into my name and avoid paying taxes since we are family?

if i insure her as a secondary driver, and me as primary, will my rates go up in the case she gets in an accident? im unclear about this.

anyone have any suggestions about which insurance company to check for rates with?

she has recently come across a chunk of money, and we're making a deal that if i help her out with this, she will help me out with a loan to buy my dream car....but i don't think an fd is such a good decision since i likely won't be able to afford the repairs, so my next choice is a rhd toyota mr2.

i know this isn't rx7 related, but i take all your guy's advice before anywhere else as its always been proven genuine in the past!

squealy

iTrader: (12)

From my understanding of insurance policies, if she has an accident, it may affect your premium because the car is registered to you and you are the principal driver. Also, I'd want to know what the misunderstanding was. Generally, there isn't such a thing as a misunderstanding causing your insurance to get cancelled. You either make too many claims, you falsify information to your insurer, or you fail to pay your premiums a number of times... or you're consistently late. That is someone that I would not want to have tied to my insurance policy, relative or not.

Also, if you are insured as the primary driver, and she gets into an accident, insurance investigators will be looking into where fuel is purchased and where service has been done, something easily tracked through debit and credit records. If they find that you have deliberately deceived them, registering it to you as the primary driver, when it is in fact your sister, they can deny any claims, and cancel that policy and any other policies that you hold with them. You could be on the hook for not only repairs, but medical expenses and damages awarded by courts to any other driver involved in an accident with her. That could be millions of dollars.

As far as companies to check rates with, I had lots of luck with CAA as being less expensive than others, and delivering a high quality of service. I also get lots of discounts given that i'm 30+, accident free, married, have multiple vehicles, and insure my house with them as well. Your situation may be different.

Hope that helps,

Matt

nick1

her policy was cancelled because of non-payment. it wasn't that she skipped out, or didn't have the money. it was due to a technical error.

if we do this, she will pay the premium in full for the year.

does anyone know if we can avoid the taxes on the vehicle transfer since she's family?

i see the potential risk. thanks for the input!

squealy

iTrader: (12)

yep. you can transfer vehicles between family members with no tax. It's a matter of getting the right form and filling it out.

Double_J

iTrader: (28)

Story time.

Many yrs ago I owned 3 5.0L mustangs. At that time I was young, living on my own and got in to many accidents. Not lieing I had a crash alblum. Needless to say my insurance was going to either explode or I was going to be given the boot. I convinced my brother to allow me to put my car in his name and he insured it. I was not on his policy, and drove the car every day. - yea that's illegal, and it could have been bad. I was on his insurance for around 10yrs or so.

I enjoyed low rates ( I paid him obviously ) but when I bought my FD I decided it was time to put my vehicles back in my name. Two things happened....
1 many insurance companies considered me as a new driver again. This meant my monthly payment would have been huge. Luckily wawanesa was cheap.
2 If I moved my Rendezvous back to my name I'd have to pay taxes on it. I asked more than one MTO office and got the same answer. Becauae the Buick was a POS I traded it in and just bought an import.

I got lucky. My situation worked out well for me and my brother. That being said I know we could have been eff'd up. Goodluck with your decision.

CloudPump

iTrader: (2)

I can answer your questions, I'm a registered insurance broker.

1) Yes, you can transfer the vehicle into your name to avoid paying taxes. You are allowed to gift a car to a direct family member.

2) If you insure the car in your name with her as a secondary driver this can have adverse consequences on you in the event she has an accident.

In the event that she crashes a car that you own and insure, the accident will be rated against your policy while she is insured there. If you remove her from your insurance, YOU will continue to be rated for her accident, as it occured under your policy. You will only stop being rated for this accident if you are able to show that she has obtained insurance of her own since the accident AND her driving record on her new policy is being rated for the accident.

Additionally: In the event that you own two cars and have two licensed drivers on the policy, each vehicle, by law, has to have a different principal operator assigned.

Now to answer your unasked questions:

1) What you're proposing *is* illegal, UNLESS you declare to your insurer that the primary operator of the vehicle is your sister, and that the vehicle is neither garaged nor operated in Kitchener, but in fact in Toronto at whatever address she lives at.

Disclosing this will put you right back in the situation where you're at already.

2) If you do not disclose the "real" arrangement with the car, your policy on that car is actually in what the industry determines is a "voidable" state. This means that the policy isn't void yet, but in the event that something occurs (accident, claim, etc.) and the insurance company investigates, the policy will be voided, which means it never actually existed (you were in a state of material misrepresentation when the policy was created) thus the terms of the contract were false at time of policy incepton. This means that your sister will get charged with driving without insurance and you will (potentially) be brought up on insuance fraud charges (70/30 shot and prevents you from getting insurance from anyone but Facility for 10 years ) and you will have a charge of material misrepresentation levied against you (100% shot and prevents you from getting insurance from anyone but Facility for 3 years).

Further information:

I'm not sure what circumstances your sister explained that her policy was canceled for non-payment under, but here are some facts about non-payment cancellations.

In the event that your insurance payment goes NSF at the bank:

1) Many (but not all) companies will attempt to go back into the account within 3-5 business days, if the payment clears at that point, all is good.

If the second attempt doesn't clear (or if your company is one that does not do second attempts):

2) Legally your insurance company can not just cancel you immediately. If a payment does not clear, the company, by law, has to send you a registered letter to the address you have your insurance policy under (Registered letters require a signature and ID to be delivered, thus ensuring the correct person gets the letter)

This letter must state that your policy is being canceled for non-payment on (insert date). This date CAN NOT be less than 15 days from the date of the missed payment and nine times out of ten is 30 days from the date of the missed payment.

This letter must also state the amount of the missed payment AND any additional fees (usually an NSF charge) required to be paid by certified funds to keep the policy in force.

If this payment is made, your policy is fine.

Howeve, if you have already had two seperate payments go NSF, and have made up those two payments, there is no re-instatement of the policy, and you will absolutely be canceled for non-payment.

__________

I provide that information because in reality, if you really do have the money, and there is a legitimate misunderstanding it is actually *very* difficult to get canceled for non-payment.

Sorry for the wall of text, but I wanted to be thorough in the information given.

If you have any questions, please don't hesitate to ask.

-Geoff

nick1

thanks guys for the "reality check"

i get good rates and don't want to mess that up. so i'm not going to help her out. since she has money now, its in both our best interest for her to just pay her high premiums, build up a reputation again with an insurance company, and get herself through it.

the reason her policy was cancelled was because she moved, changed her phone number, and didn't inform the insurance company. therefore, when they went to renew the policy, they couldn't conact her....anyways that's the story i've got.

again, reality check. im not going to screw myself over.

kind of wish i could remove this thread. mods? please?

CloudPump

iTrader: (2)

If your sister did not respond to the insurance company's offer to renew, this is not a non-payment cancellation. She is under no obligation to accept their terms of renewal as the insurance contract she signed is for a 1 year term.

-Geoff

misterstyx69

iTrader: (142)

If you do this,Your sister is gonna be Driving on YOUR name.
If she gets in an Accident, "Guess" who they will go after?
YOU.
Family and Love and La-DI DA....not this Time..Don't cave in.
Tell her to Own up to her own responsibilities,Put her Big girl pants on,and get her Own insurance.
(sorry for being Harsh Nick,I had to work for what I got,,nobody is taking that away.)

Double_J

iTrader: (28)

Have her try calling Cambridge Insurance. It is a broker, and they might be able to help her out. They were the ones who helped me (greatly) when I rejoined the insurance world. 519-653-6072 or email tdeemert@cible.ca

FC3Sdrift

iTrader: (5)

I'm still waiting for pics of your sisters you keep taunting us with