Garaging location-it is a question asked to anyone who purchases auto insurance, but do you really know what it is? The term itself can be misleading because it in no way refers to whether or not you have a garage or if your vehicle is parked in one. What makes a garaging address different from a regular address?
The answer is actually quite simple. A garaging address is the location where your vehicle is parked when not in use. In most cases this is the place where you live, but there are many common occurrences where this is not the case. A prime (and timely) example is a college student who brings a car to school. The garaging location of that car changes throughout the year. While the student is away at school with the car, the garaging address will be the address of their school or student apartment. When they come home for winter or summer break the garaging location will change to the address where they live while not in school. Another common example is when the owner of a vehicle lets someone else borrow their car for a period of time. If Aunt Sue’s car breaks down and you happen to have a spare vehicle for her to borrow for a month or so, you must be sure to amend the garaging location of that car to Aunt Sue’s address (and also be sure to add Aunt Sue as a driver to your policy).
Now that we have covered what garaging means, why is it important? It is actually extremely important because the vehicle’s garaging location has a big impact on the rates you will be charged for auto insurance. The insurance industry looks at each city and town and uses population size, auto theft statistics, accident statistics, etc. to determine how much to charge for insurance on a vehicle. The insurance rate for a vehicle in Rochester, MA, a sparsely populated area with low crime rates will cost less than a vehicle garaged in Fall River, MA, a more densely populated city with a higher crime rate. The reason is the likelihood of getting into an accident or having a vehicle stolen is higher in a more densely populated city with higher crime than in a town with more farm animals than residents and relatively low crime rates. High traffic and narrow roads are not as prevalent in Rochester as they are in Fall River, which equates to less accidents each year in that town. Because garaging location impacts insurance rates, a carrier can deny a claim if a vehicle has the wrong garaging location listed on the insurance policy. This is because the carrier was unable to collect the proper amount of premium to reflect the actual risk of the vehicle being insured.
Be sure you are listing the correct garaging location of your vehicles on your insurance policy. There is no worse time to find out you don’t have coverage than after a loss has occurred. If you are unsure of what your insurance policy has for garaging locations of your vehicles, call your agent to ask. It is better to address the issue now and pay a little more than to save a few bucks now only to find out you have been throwing your money out the window all this time because the policy will not pay out due to a garaging issue. If you have any questions or would like a quote on your vehicles and their proper garaging locations, call any of our FBinsure offices or visit our website at www.fbinsure.com today.