09.16.26 Auto Insurance Warning / Social Media Scam Ads
The Clark Howard Podcast
Clark Howard warns listeners about a surge in auto insurance claim denials when non-named drivers operate insured vehicles, and exposes the
Key takeaways
- Nearly half of all auto insurance claims are now being denied, especially when unauthorized drivers use the vehicle.
- Allowing friends or family to drive your car without being listed on the policy can result in claim denials and financial loss.
Main topics
- Auto insurance claim denials
- Risks of lending vehicles to others
Notable quotes
"If you let a friend, hey, I need to just run with your car... insurers now will say, no."
Conclusion
Clark urges drivers to avoid lending their cars to non-named individua
Transcript preview
Speaker 1 (0:04) It's my pleasure to welcome you here to the Clark Howard Show. You know, our mission is to serve you with advice and information that empowers you to make better financial decisions in your life. Today, I have new advice for all drivers. Insurers are cracking down on something many of us do from time to time, and they're refusing to pay the claims. Also, You may recall that I've talked about how a sleazy car insurance tool has made an AI video of me endorsing its product. This is happening all over social media. And gosh, people are mad at me about this one thinking I'm really selling out. I'm going to tell you how to avoid some of the tricks that scamsters are using. But right now, trick or treat, oh man, we got six weeks to Halloween and this feels like just an ugly trick happening from America's auto insurers. I mentioned this before and there was somebody from the insurance industry who posted a very well thought out Clark Stinks. But the trend is not you're my friend. Insurers now in the U.S. are not paying on just under half of all auto claims. And the increase in the denials is absolutely stunning across different insurers. Part of it, the industry says, the post we had on Clark Stinks, that it has to do with a lot of illegitimate bodily injury claims. But people are having trouble getting all kinds of things paid now by their auto insurer. And it's just a fact. Now, you want something that will get a claim not paid or get you canceled? If you allow someone to drive your car who is not named on your policy. In the past, this was not a criteria for an insurer to say they weren't going to pay. But as insurers are looking to increase their profitability, well, I got to tell you that if you let a friend, hey, I need to just run with your car, blah, blah, blah, or a work colleague is going to go pick something up for you, something like that, and you give them your vehicle to drive, and they have an accident, even a minor one, insurers now will say, no, not every insurer. but it's become a common practice. Now, I mentioned once before that my middle daughter has a car insured with an insurer that in bold type says that her vehicle is not covered for any other driver other than a named driver. And it says it bold. And so just know that being casual and letting a relative drive your car or something like that. Don't do it anymore because insurers, remember what I said, almost half the time they're not paying claims. Sometimes, as we had in the insurance industry post response, it is true. Maybe your deductible's high enough that it ends up being a non-payout or whatever it is. But there is a clear desire of the insurance industry to have those cute TV ads. get you to buy from them. But then you were serious about that? We weren't actually covering you. We're not paying for that. So just know that it's a tougher industry and they're living by the contract. Pay attention to it. And if there's something you are trying to decide if it's okay to do, if you're trying to decide, it's not. You have never had a problem with your insurer, right? I've Speaker 2 (4:29) been fortunate. I mean, I am with Amica. They're a very good insurer, but it probably costs more than I would have to pay with another insurer. Speaker 1 (4:36) Right. So I had somebody come up to me in an airport the other day and say, you know, I called that Amica company that you keep talking about how great they are. And they were five times the cost of my current insurer. Wow. Speaker 2 (4:52) Wow. Speaker 1 (4:53) I don't know how that could be five times. Right. But it's like, I'm sorry, I don't own Speaker 2 (4:57) Amica. Speaker 1 (4:58) I know. They are of the relatively large insurers. They're the one year after year after year that's top of the heap for how they handle claims. Because ultimately, do you have insurance? Because you have to. Do you have insurance? Because if something goes wrong, it pays. And it's good to be with somebody who actually pays. Speaker 2 (5:19) Yes. Okay, here are some questions. This one's from Jeff in South Carolina. Thank you, Clark, for your years of service to others in giving tips, advice, and information to help us win financially. I have a pension and a portfolio that I anticipate will allow me to retire in seven to eight years, and it will serve as a bridge to Social Security at 70. As I plan for that life change, I am looking to set aside a chunk of money for cars and technology. Two advances in technology have caught my attention as ways to make my retired life more enjoyable. Where do you see technology evolving with self-driving cars? I.e., I want to get in the car and it drives 15 hours to Wisconsin to visit family while I sleep, read, etc. And a Tesla Optimus-style robot. Will I be able to tell the robot to do a variety of household chores that I don't want to do that day? I get the sense we are close to these being a reality and relatively affordable, but are we looking at 10? 25 years or not in my lifetime. Speaker 1 (6:19) Okay. So first of all, with the self-driving cars, they're already on the roads and more and more and more places. And talking about driving to Wisconsin, one of our staffers just drove from California to the East coast in her Tesla and just sat there all the way across the country. Just put in the destination it told her where to stop to charge all along the route. Did the driving almost 100 % coast to coast. Tesla charges $100 a month for that. Speaker 2 (6:55) You can't sleep yet. Speaker 1 (6:56) Can't sleep. But Waymo, you sit in the back. Speaker 2 (6:59) And Speaker 1 (7:00) Waymo added, I think, 15 new cities recently. Absolutely, that is going to happen. And a