How did this car insurance snafu happen?

January 26, 2018 12:19 PM

A friend recently had a car accident in her leased vehicle; she has had it for just under a year, leased from a prominent local dealership. She called her insurance company to report, and lo and behold- the leased vehicle she's been driving all this time was not on the policy. Her previous car was still listed. How is this possible?

Wouldn't the terms of the lease require valid proof of insurance? How can a year go by and this discrepancy not be noticed?? I have never leased so I don't know how that differs from a regular car purchase. But I'm baffled. (This is happening in Ohio if that helps.)

posted by I_Love_Bananas to Work & Money (12 answers total)

Did she call the insurance company to change the vehicle information when she leased the vehicle?
posted by CiaoMela at 12:28 PM on January 26, 2018 [5 favorites]

what's on the insurance cards in her glovebox?
posted by Dr. Twist at 12:41 PM on January 26, 2018 [2 favorites]

I'm confused as to why you're confused... This doesn't happen automatically, she would have had to actively do it. The company she's leasing from may have dropped the ball on checking for valid insurance, but that's more their own policy than their legal responsibility. It was your friend's responsibility to make it happen.
posted by brainmouse at 12:42 PM on January 26, 2018 [12 favorites]

It was your friend's responsibility to make it happen

It is the responsibility of the insured (your friend) to communicate with the insurer (your friend's insurance company).

Any failure of the leasing company to inquire about valid insurance is unfortunate, but essentially irrelevant.
posted by John Borrowman at 12:45 PM on January 26, 2018 [1 favorite]

I have leased two vehicles and in both cases I just had to provide my insurer's info, not any sort of proof that the car has been added to the policy. As others have said, the dealership does not check beyond that and it is up to the lessee to actually add the car to the insurance policy.

This is in contrast to buying a house where I did have to provide proof that the new house had been added to my policy (with a start date in the future) before my loans closed.
posted by joan_holloway at 12:54 PM on January 26, 2018 [2 favorites]

It seems like it would be in the lessor's best interest to make sure the car is insured, since there are specific insurance requirements. I'm racking my brain, as a lessee in Ohio, and I can't remember exactly what proof the dealership required for me to drive my car off the lot. I know for a purchase it was an insurance card for that specific VIN, and I doubt that it was different for the lease. It sounds like a coincidence in which both the dealership and your friend were extremely sloppy. It's a super bummer that your friend will probably get the short end of the stick, though, unless she can prove that it's an error on the insurance company's end.
posted by chesty_a_arthur at 1:26 PM on January 26, 2018

Was she driving around without proof of insurance? She should have gotten a new Proof of Insurance card within a year -- they send new ones every six months. Did she miss that it was still covering her old car?

There is a small possibility that she may be covered under her credit card if she's using that to pay the rental fees.
posted by ananci at 1:30 PM on January 26, 2018 [1 favorite]

In the past I've been able to just show the dealership that I had insurance for any car, not that I had established insurance for the new car.
posted by hwyengr at 1:50 PM on January 26, 2018

She should have received a new insurance card when we reported she had a new vehicle, and again at some point as the policy usually renews every six months. If those documents still show her old car this is going to be a very expensive lesson in managing her financial affairs.
posted by COD at 2:06 PM on January 26, 2018 [3 favorites]

Maybe her fault, but maybe her insurance agent or company screwed up something on their end. It does happen. Always double-check your insurance paperwork!
posted by stowaway at 2:52 PM on January 26, 2018 [1 favorite]

I couldn't get a license plate for my car without proof of insurance, including matching the VIN.
posted by I'm Not Even Supposed To Be Here Today! at 3:19 PM on January 26, 2018

Best answer: "How is this possible?"

Very easily, especially if your friend is older (or old-school) and still makes changes to her policy by talking to her agent instead of through a website. For example: your friend leases her car on Saturday. Her agent's office is closed. She didn't expect to actually sign a lease, so she didn't call ahead to add a new vehicle to her policy on Friday, and now she can't call again until Monday. Monday, she forgets, and the new car never gets added.

There any number of scenarios, either her fault or the agent's. I used to work for a company that made software for agents (in Ohio, although that not relevant - I just miss living there) and I can think of several technological reasons on the agent's part that the change might not have been processed. Agents have insurance to cover situations where they've messed up, so she should definitely check with her agent to see if she requested to have the vehicle added. But the leasing company/dealership bear no responsibility. It's either your friend's fault or her agent's.
posted by kevinbelt at 6:27 PM on January 26, 2018 [1 favorite]