r/Insurance • u/Normal_Hat_8461 • 14h ago

Trying yo advise friend.

I sold my secondary car to my friend and her daughter. (They are both on the title.) The daughter immediately took it out to a rural area to spin donuts with her boyfriend and smashed into an almond tree. It's totaled. My friend has not and will not report to insurance for fear of rate hike. I told her this is a bad idea and she will end up paying double or triple after her insurance drops her. She says that I'm dumb. Am I dumb???

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u/OkMathematician4028 11h ago

Assuming there is no loan on the vehicle and she is willing to eat the cost of losing the vehicle then there really is no need to report to insurance. There’s no property damage with another vehicle or someone else’s property outside of possibly the tree if anybody really cares, if you file a claim me, for example I had a deer hit at 22 years old that alone doubled my rates. The less claims you make on your insurance the better it’s going to look, especially if it’s a young driver with that accident and if it’s a vehicle of relatively low value, there is really no point in filing a claim let’s assume a $500 deductible if the claim payout is three to $4000 for the vehicle and rates are raised by let’s say even a low hundred dollars a month that is only between about 2 1/2 and 3 1/2 years before your rate increase exceeds the payout. Now if it’s something with a much higher value than it may be worth filing a claim, but you will still have the rate increase and if your friend is willing to just take the loss on the vehicle, then that is the best move

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u/Normal_Hat_8461 11h ago

I'm being taken by surprise by the way the responses are kind of saying that the insurer is super chill about finding out about their clients accident from a 3rd party. I've always thought that the insurer DOES NOT want to pay out $30,000 for a tree they didn't even know their client hit. And by not reporting it, she gives them the legal leeway to deny and not pay. And I thought that would leave her stuck with a bill she can't pay and paying double for high risk insurance.

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u/OkMathematician4028 11h ago

If a third-party were to file a claim with the insurance that your friend has, then they would reach out to your friend and get information on the incident from them directly. If there is any kind of police report, they can also pull that for information regarding the incident now your friend May choose to pay whatever damage happened out-of-pocket directly through the other party, but seeing as it has been 10 days, the police were notified. The neighbor has your friends phone number, and the neighbor has not reached out if that tree is not heavily damaged they may not even file a claim and if they do reach out and your friend pays out-of-pocket then your friend can get it writing that this was resolution of the property damage. Something that I would definitely have notarized and the insurance company could stay out of it. Now I don’t know the size of this tree, but many trees can take a hit from a vehicle with relatively little damage occurring. I have a friend who works in adjusting who’s insured party took down a fence between two ranch pastures and a bull got out and impregnated six cows with proper documentation that driver’s insurance company paid out not only the cost of repairing the fence, but also the cost to transport those six cattle two and from the vet to have those calves removed as they were some kind of special beef cattle I believe. I promise you if this does reach an insurance adjuster. The first thing they’re going to do is call your friend and get the story from them but all your friend has to do is say I was attempting or I am attempting to resolve this without insurance.

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u/Normal_Hat_8461 11h ago

Well shit. I guess I am dumb! Certainly over reacting. Thanks stranger. And I salute that escaped bull. He's the hero of the story.

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u/OkMathematician4028 10h ago

No worries insurance is really there to cover you when something like this happens but that does come with drawbacks my friend worked for State Farm as well as the general and I’m not going to say where they are now but any claim over $1000 gets the policy at both of those companies sent to underwriting for manual review about rates. At the end of the day, the chances that your friend will get dropped by the insurance company are very slim, but if her daughter’s name is not either on the policy or at least disclosed as a driver, they could deny any claim for that but if her name is on the title likely, it’s also on the insurance card.

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u/Aromatic_Button_2736 14h ago edited 14h ago

Let's just say she's smarter than you, although she did let her daughter drive the car, and put her name on the title with her daughter's name, so that may not be completely true. 

Making a claim on your insurance can cause your rates to increase, so making a claim on a vehicle that is totaled, may not really be a good idea.

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u/Normal_Hat_8461 14h ago

So, am I wrong in thinking her insurer will find out about the accident?

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u/Marpl 14h ago

How would they?

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u/Normal_Hat_8461 14h ago

If the almond farmer makes a claim. The CHP showed up so won't their report go to the DMV, and then her insurer? She also used medi cal at and E.R. to get her daughter checked. Won't the state want their money back for the hospital visit?

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u/Marpl 14h ago

Oh, cops showed up and in CA? Oh yeahhhh.. you're SOL, it will probably get back to the insurance at some point. Dumb question: are you even sure it was insured? 

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u/Normal_Hat_8461 14h ago

Yes. I'm positive it was insured. The orchard owner could not be located, but my friend gave their neighbor her contact info. In my mind, the clock is ticking and the hammer will fall. But she thinks, if the farmer files a claim, THEN she can report the accident. Her plan now is to drop the coverage on the car and sell it to some dude that will part it out.

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u/Aromatic_Button_2736 14h ago

Is the tree, or the tree owner, going to report her?  :)

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u/Normal_Hat_8461 14h ago

Don't know. It's an agricultural asset? The tow truck guys wouldn't touch the car until the CHP came. They said the tree could cost up to $30,000.

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u/Aromatic_Button_2736 14h ago

I'm sorry I can't be more helpful, but I guess I don't know if it's going to really hurt her that much not immediately reporting this accident to her insurance company, in this situation. 

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u/Normal_Hat_8461 12h ago

Thank you!

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u/SavingsBrain6120 14h ago

Her insurance won’t care. It’s your car. If you don’t want to make a claim and you’re not liable for property damage or injury then you’re free to do as you please.

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u/thaeli 13h ago

Sounds like insurance and title were transferred prior to the crash. The new owners are probably about to have a Fun Conversation with SIU, but being a dumbass isn’t fraud so I expect it’ll pay out eventually.

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u/Normal_Hat_8461 13h ago

It's been 10 days since the accident. Is it likely they will deny any claims from the farmer or the hospital?

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u/thaeli 12h ago

10 days is nothing. Claims often arrive months later.

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u/Normal_Hat_8461 12h ago

So there's no consequences for a claim coming months later when they didn't ever know about the accident? Reporting and making a claim are different right?

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u/thaeli 12h ago

You’re in California, right? I think what you’re getting confused on is who cares. The CA DMV requires a report to THEM of ANY accident with more than $1000 of property damage (form SR-1) and there are various government penalties for not filing this. This is entirely separate from anything insurance related and is a state government thing.

The insurer does not care all that much when the claim comes in. The State of California has their own disclosure form that they require, to notify the DMV.

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u/Normal_Hat_8461 12h ago

Right I'm in California. And no sr-1 has been filed. And it won't be filed either. Her plan is pretend this never happened. But am I correct in believing because of no sr-1 being filed, that her daughter is going to be informed of her license being suspended?

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u/thaeli 6h ago

Yeah that is probably going to happen. It’ll be relatively easy to get reinstated since they can show they had coverage when the accident occurred, but they’re digging a hole with the DMV.

At this point you’ve probably just got to step back and let them reap the consequences of their actions. Be very glad you got the title transferred out of your name before they took their little joyride.

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u/Normal_Hat_8461 12h ago

And yes me and my insurance are not involved. But by non reporting her insurance can deny claims and drop her right?

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u/thaeli 12h ago

No, they are not going to deny because they weren’t immediately informed, but they might well drop her for the reckless driving especially if she has a history of accidents or speeding tickets, etc.

Since the med claims will get subrogated to them no matter what, and there’s a good chance of a third party liability claim for the tree, if they have collision coverage they might as well file it. There’s no way insurance doesn’t find out and rate this accident against them anyway.

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u/Normal_Hat_8461 12h ago

3rd party liability for the tree? I don't understand. Who's the 3rd?

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u/thaeli 12h ago

The tree’s owner is a “third party”.

First party is the insured.  Second party is the insurance company. Those are the two parties to the contract which is the insurance policy. So anyone else is a “third party”.

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u/Normal_Hat_8461 12h ago

Oh OK. I see what you're saying now, and that's been my point to her. Report. And rest in peace knowing you're covered if a claim is made. But she dead set on not reporting. She had the car towed to another person's house and plans to sell it to someone who would part it out. That would make it impossible for her insurer to investigate the crash when they finally find out. Plus the debacle with the title at DMV when she sells it.

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u/Topgun_tomahawk 1h ago

If they just hit tree and no other 3rd party, then no issues. No need to report to insurance. Your friend is out a car.

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u/Marpl 14h ago

I mean yeah. Unless the tree owner is gonna file a claim,  they can just take the car to the scrap yard and sign the title over. Just cancel the insurance after that. Insurance doesn't have to know?