This is a true story. The names have been changed to protect the innocent.
A customer wanted to help her friend “Sara” to purchase a car. During the purchase process, Sara’s credit was so bad and finances were so tight the only way Sara could get the car would be to put it in “Carla’s” name. Carla made Sara promise to wait until she had insurance on it before she drives it…
A little over a week later, Sara still hasn’t bought insurance. But she needs food and the store is right around the corner. While leaving the store, a distracted Sara backs into a pedestrian. Sara picks up the pedestrian and helps her to her car.
Fast forward again a couple of weeks. Carla (who really had nothing to do with the accident) gets a visit from the county sheriff! Because the car is in her name, they tracked her down and want details from her to find out who is responsible. She has little choice but to provide the name and address of Sara. She thought that she was clear of any troubles when she learned that Sara was cited for the incident in the parking lot.
Fast forward a couple of month. Carla’s life starts getting interrupted by calls from a collection agency demanding $5,000 for damages from the accident. You see, because Carla is the titled owner of the vehicle and because the law in Ohio says that the owner of a vehicle is ultimately responsible for damages caused by that vehicle, Carla now has to pay back the victim’s insurance company. And you’d think that is the worst case scenario, right? Wrong… Once Carla agreed to pay back the $5,000 (which was only part of the claim), she got another call for the rest of it. Collections agents for a different line of coverage called uninsured motorist bodily injury are now demanding $70,000 more on top of the $5,000.
This is real situation. And attempts to skirt the system by going without coverage or trying to classify things incorrectly to pay a lesser price will almost always lead to scenarios just like this. Carla could have still helped her friend. The right way to do it would have been to help buy the car, even in her name, and acquire an insurance policy that she could have passed the cost on to the customer. Protect yourself from situations like this. There are T’s to cross and I’s to dot that can help you avoid situations like this. It is certainly worth it to understand the risk. After all, it’s everywhere.