teenager insurance question

[friendly_jacek]

My friends' son turned 16 and he got his full FL license and he drives my friends' car. They previously informed the insurance that he had a permit, but did not notify insurance about full license and haven't received an increase in premium.

I'm thinking this is a big mistake, but don't fully understand the laws and customs. When I put my teenage daughter on our policy when she got her license, we ended up paying at least $1000 more per year.

 

[Doog]

State Farm keeps your premium low until age 16 then WHAMMO...but they have all drivers and dependents birth dates. But I would notify them anyway. Mine will go up probably about 1200 because she will have access to 3 vehicles.

 

[mclasser]

Seems like they did things in reverse. You don't have to inform the insurance co. about the permit but have to for the license. That's what AAA has always told me.

 

[Joe_Power]

Mind your own business????

 

[GaleHawkins]

Some do pay a lot and others next to nothing when they get their licenses. We move to a new company next week because Countryway pulled out of the state and we got a hobby farm policy with all equipment and vehicles with the same underwriter. They went ahead and put both children on as drivers but they do not have their licenses yet but that will happen about a month after the policy went into effect. I do not ask the cost because they had the low quote on the complete package. If we had went with Liberty Mutual for our full property and vehicle coverage it added $150 per year per child. Joe does make a point in a case like this however.

 

[Nick R]

You are technically supposed to add to the policy, but you can get away without doing it until underwriting finds out that there is another driver in the house, and they will make them get rated. There aren't any penalties to doing so as far as I know. Depends on how honest you/they are. Insuring a 16 year old male is going to be expensive.

Source: Close friend who works for an insurance company

 

[Astro14]

It's a big mistake. The policy, generally speaking, requires the insured to be honest in updating information that affects risk, like adding a driver (now that the son has a license, he's a driver that will be operating without direct supervision...huge difference from kid with a permit). Failure to do so can result in him being dropped or claims being denied. Good idea to read the policy and find out what's required of him. Withholding information to save money could be considered fraudulent....

 

[Nick R]

Originally Posted By: Astro14
It's a big mistake. The policy, generally speaking, requires the insured to be honest in updating information that affects risk, like adding a driver (now that the son has a license, he's a driver that will be operating without direct supervision...huge difference from kid with a permit). Failure to do so can result in him being dropped or claims being denied. Good idea to read the policy and find out what's required of him. Withholding information to save money could be considered fraudulent....


I didn't say it was a good idea or that they should do it. Just that it is possible.

 

[dave180]

My agent told me no increase until they actually pass the driver exam and get their regular probationary license. The instructional permit period is kind of a freebee I guess.

 

[daves87rs]

Originally Posted By: dave180
My agent told me no increase until they actually pass the driver exam and get their regular probationary license. The instructional permit period is kind of a freebee I guess.



Not here....they hit you as soon as you add them...

 

[Wolf359]

You're not making clear which friend is driving which car. I assume you mean the son is driving the father's car. By not adding the son to the policy if anything happens, the insurance could deny the claim because he's in the same household, but not on the policy. On the other hand if your friend is driving some other friend's car and they're not living at the same address, then that's just the same as letting a friend drive your car and there'd be no need to notify the insurance. I had a friend who always drove his girlfriend's car. He didn't care how many speeding tickets he got because he wasn't on his girlfriend's insurance as they were at different addresses.

 

[Rick in PA]

My view? Insurance companies are businesses and as such they are in the business to make money. If a customer doesn't abide by the contract, they won't abide by the contract. If the kid has an accident, I wouldn't be surprised to find it is not covered... "Skating on thin ice."

 

[The_Jeff]

My policy specifically states that you have to list all licensed drivers.

In the penalties section, they say they won't pay out if you don't list the drivers *AND* the unlisted driver would have resulted in a premium increase.

Why the semantics?

If you have a 16 year old, your insurance (read it) might say you MUST list all licensed drivers. This could lead to someone not letting their kid get a license, even if they don't plan to drive. However if the kid gets a license then stays out of the driver's seat there's no penalty.

Your policy is that little bookie thing that shows up when you renew.

FTR, eons ago when I had my Massachusetts permit the insurance bump wasn't there as they seem to consider it on the training adult's license.

 

[friendly_jacek]

Originally Posted By: Wolf359
You're not making clear which friend is driving which car. I assume you mean the son is driving the father's car.


Sorry for not making it clear. Your assumption is correct.

 

[friendly_jacek]

Originally Posted By: Joe_Power
Mind your own business????


Well, if they are doing wrong thing, I would like to warn them.
If what they are doing is legal, I want to do it too. My son is turning 16 later this year, and I suspect the insurance hit will be more than $1000 (again).

 

[GaleHawkins]

Originally Posted By: dave180
My agent told me no increase until they actually pass the driver exam and get their regular probationary license. The instructional permit period is kind of a freebee I guess.


Same in KY. We had to change carriers because the old one did a non renewal because they are pulling out of the state and so all four of us will be on the new policy but only two of us have full driver's licenses until at least April. Son is doing OK on ice and snow so far but going to have to get the daughter out on it since we are getting a freezing rain at this moment.

I was happy to learn we are not going to see a big hit when the kids get licenses. That changes quickly I expect if accidents/tickets start showing up on their records. We are at least 50 miles from any interstate or larger town which may help and 20 miles from any small town.

 

[Nick R]

Same here in new york. You don't have to be rated on insurance until you get an actual license.

 

[friendly_jacek]

No, the question was what happens if you don't volunteer that info.

 

[hattaresguy]

Well IMHO trying to "pull one over" on an insurance company never works out. They have teams of highly paid lawyers to try to not pay claims, on the other end you have hearsay and?


If the kid is driving cars he should be added to the policy as a driver.

 

[opus1]

Originally Posted By: friendly_jacek
No, the question was what happens if you don't volunteer that info.
If you never have to make a claim due to the teen's driving, you save some dough.

If you do have to make a claim, all bets are off.

Deceiving the insurance company is never a good idea. A coworker got burned for not informing her insurance company that she was driving more. She commuted on the train and was getting a low-mileage discount. She got sick of the train, started driving downtown and didn't inform her insurance co. that she did that, and even fudged the occasional questionairre that she received asking for the vehicle's currnet mileage. About 2 years in, she got in an accident and when the body shop informed the insurance company of the car's current mileage, it hit the fan. They threatened to not pay for anything at first, using fraud as an excuse, but finally paid off but billed her for the difference in the rate she was charged based on low miles driven vs what they would have charged had she been honest. I'm not positive, but I think they flagged her as not being eligible for that discount in the future as well. It was over 20 years ago, so the memory is a bit fuzzy.

When I want to gamble, I go to a casino. With insurance, it's a no-brainer; don't hide anything, don't be deceptive, period. It's hard enough to get them to pay off when you've done everything right, so why give them an excuse not to do so?