Garaging

    Posted by MAIA on May 7, 2019 12:01:00 AM

    QUESTION

    This question was answered based upon current rules, regulations & statutes in effect on April 17, 2019

    MA Auto policy - Looking for feedback on vehicles garaged at college. We (the carrier) expect that garaging should be changed to reflect the vehicle being away at school and will deny a claim if garaging is not updated. Trying to understand if we are out of step on this process in regards to what you have seen other carriers doing. Looking for any thoughts or information that you have on this. Thank you!! 

    ANSWER

    Kathy Cormier:  Typically when we are asked this question on garaging, I always refer to the companies filing with the DOI.  The MAP, Dec Page, Renewal Questionnaire all have language that stated if there is false information regarding garaging (among other things) the carrier can refuse to pay claims. I looked at your filing and found this the garaging rule along with the notice from the Dec Page and Application for insurance.

    RULE 4 RESIDENCE LOCATION AND GARAGING

    The proper rate schedules and rules are those effective in the city or town where the automobile is principally  garaged. Motor vehicles used by salespeople or solicitors, or those with similar duties, requiring the operation of the motor vehicle in more than one rating territory in Massachusetts, shall be assigned to the territory determined by the place of principal garaging, or, if there is no specific city or town of principal garaging, then, by the residential address of the operator, or, if the residential address of the operator cannot be determined, then, by the Massachusetts business address of the operator. No adjustment of the premium shall be made by reason of a change in the place of principal garaging during the policy period unless such change is permanent.

    Massachusetts registration is required of non-residents in accordance with reciprocal agreements with the various states as determined by the Registrar of Motor Vehicles.

    Any motor vehicle owned by a non-resident of Massachusetts for which Massachusetts registration is required, regularly garaged inside the Commonwealth, shall be charged the rate for the territory in which the motor vehicle is principally garaged by such non-resident during the period of Massachusetts registration.

    Any motor vehicle, whether owned by a resident or non-resident of Massachusetts for which Massachusetts registration is required, regularly garaged outside of Massachusetts shall be written at limits of liability at least equal to the financial responsibility limits of the state of principal garaging, and shall be charged the rates for vehicles garaged in that location.

    I found this language on your companies Dec Page:

    It is important that you carefully review all the information on this document and make sure that it is complete and accurate, it sets forth all of the coverages you selected, and it identifies all drivers and the garaging address for each insured vehicle. Under certain circumstances, your failure to provide complete and accurate information could result in the cancellation of your policy or a denial of your claims. If you believe that any of the information is incorrect or incomplete, it is important that you promptly contact us to make sure that all necessary changes are made regarding your policy information.

    Your application for coverage also states:

    NOTICE: It is a crime to knowingly provide false or fraudulent information for the purpose of defrauding an insurance company. If you or someone else on your behalf knowingly gives us false, deceptive, misleading or incomplete information in this application and if such false, deceptive, misleading or incomplete information increases our risk of loss, we may refuse to pay claims under any or all of the Optional Insurance Parts and we may cancel your policy. Such information includes the description and the place of garaging of the vehicle(s) to be insured, the names of all household members and customary operators required to be listed and the answers given above for all listed operators. You must notify us of changes that have occurred prior to the renewal of this policy and during the policy period. We may also limit our payments under Part 3 and Part 4.

    I’m not sure if this is what you were looking for, I hope this helps.

    Company:  Thank you for this information.  I guess the question really falls into a grey area.  If car is away at school, a typical university, somewhere 2-3 hours from where insured student actually lives, we have always expected that garaging be changed to reflect that.  However, an argument can be made that college address would not be principal garaging.  If student comes home every long weekend and during breaks you could argue it is 50/50 scenario.  It would actually be 26 – 27 weeks away each year. 

    We were looking to MAIA to get a sense as to what industry does with this issue.  We are being told other carriers don’t care about car at school garaging unless it is more of a graduate student staying there year round. 

    Thank you for your help.

    Irene Morrill:  I suggested to Kathy that we ask agents in our classes and when we speak to them. 

    In the particular case you gave (which was how I lived my college life in my Freshman year but not the others) it is a grey area. I would hope that that agent had this discussion with the client and it was duly noted in the file and that with this information the adjuster can be persuaded to “do the right thing for a valued customer”.  I believe the norm is for kids to only come home on vacations which leaves college as the proper garaging. From what I hear in classes companies require the garaging to be the college in those situations 

    Interesting your comment that the “agents said none of the other companies care” reminds me of kids wanting to go someplace “all the other parents  are letting their kids go” or a bank that wants something stupid on a binder “all the other agents do that”. 

    But I will make a concerted effort to see what other carriers are doing over the next month or so and get back to you.

    This document is not a legal opinion and should not be relied upon as such. The intent of this document is to provide a general background regarding the topic or topics discussed, not to provide legal advice. Producers and agencies should consult an attorney regarding specific situations and specific questions with respect to the topic or topics covered in this document. Neither the Massachusetts Association of Insurance Agents, Number One Insurance Agency nor any of its employees shall be responsible for any errors or omissions regarding any statements made in this document, nor any errors or omissions regarding any statutes, regulations, court rules, and/or any other government documents cited in this document.

    Topics: 2018

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