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Here's the real life scenario for you.  This actually happened so don't ever let it happen to you.

A customer's daughter (let's call her Carla) wanted to "help" her friend Sara purchase a car.  Well, during the process, it was discovered that Sara's credit was so bad and finances were so tight that the only way Sara could get this car would be for Carla to put it in her name.  Carla made Sara promise to wait until she has insurance on it before she drives it...

Fast forward a couple of days.  Sara knows she hasn't bought insurance yet but she really needs to go to the local store from some supplies.  It's right around the corner so what can happen, right?  

While leaving the store, Sara has some distractions to deal with (a child in the backseat and a text message that needs she needs to send right away).  Anyhow, as she is backing up, she doesn't realize there is a pedestrian walking immediately behind her car.  She hears the screams and stops her car only to learn that she has knocked an elderly shopper off of her feet and onto the cold pavement.  Fortunately, it seems as though she is in one piece and Sara picks her up and helps her on her way 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.

Posted 11:42 AM

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