I recently found myself in a conversation with an interesting individual who is in the insurance industry by trade. This person made the following assertion:
One need not inform one’s auto insurance company when a young driver in the household comes of age (and gets a license) because you insure the CAR and not the driver(s), the insurance follows the CAR, and that by not volunteering this info, one can save thousands of Dollars, American, provided the young driver in question avoids a collision. If the young person WAS involved in an incident, coverage would be in place, but soon thereafter you’d recieve a “courteously phrased letter” from your insurace company informing you that your premium is now something on the order of, say, $1,000,000 every six minutes.
The person also attempted to support this position using the analogy “It would be like letting your older, licensed brother borrow your car. He’d be covered.”
Is this so much huck and jive, or one of western civilization’s best kept secrets?
I don’t have any males approaching this situation, but my FRIEND does,
Sounds like BS to me. I mean, yes, you could avoid paying insurance all together, if you were so inclined, and save a ton of money if you never get in a collision.
I await people who know what they’re talking about, though.
I am NOT talking about Amusing Unisured Motorist Tricks here. I am asking if this scenario is equal to driving legally and with insurance coverage in force.
Most places this will not work if the 16 year old lives at your same address. The idea that the car is insured no matter who drives it is based on them not living with you.
In addition, even then you had better check your policy. Some have a rider that states they will only insure the occational driver if he/she are over a certain age (usually 21).
Needless to say, I- er, my FRIEND would be scrutinizng the policy carefully indeed. I’ll with take this opportunity to add that I’m dubious about the accuracy of the observation.
Allowing someone to operate a vehicle who also permanently resides at the exact same address of the insured falls into the category of an “exempt” (read: someone who lives with you) driver.
Do so at your own risk. I’m rather certain the bond issuer will not regard it in a similarly liberal fashion.
I think it depends on the policy. I strongly recommend that your friend takes five minutes to ring up the insurance company and ask them.
It’s not worth the risk to allow anyone, let alone a 16-year-old(!!!), to drive your car if there’s even the slightest possibility he/she won’t be insured for some reason.
IIRC from working at State Farm, if your 16 year old gets his/her DL, your insurance is going up whether they ever drive the car or not. The reasoning is that the kid lives with you, he’s legally able to drive, and maybe little Johnny may have to drive his old and decrepit parents to the Emergency Room, or grandma to church, and since he’s 16 he’s bound to total the car, so you need to be charged a coupla thousand more a year because of this risk.
There are too many loopholes in car insurance policies, and they all favor the insurance company. The exempt driver thing MAY work but I wouldn’t be a bit surprised if there is a clause that says that drivers aged 16-whatever are excluded from the exempt driver rule. Teenagers are just too risky a demographic to let on the roads without the insurance company sticking it to you first.
That’s the way I read it. Yep, the aforementioned scenario is compelling indeed, but a little to gamey in practice, I think. Especially with the stakes being high enough to financially Pearl Harbor anyone who might try it.
What my insurance company told us was that if the person lives at the same address as you and is not listed as a driver on the policy then they cannot drive the car or they will not be covered.
Also if there is a ‘reasonable expectation’ that he can use the car whenever he needs wether he lives at the address or not then he needs to be listed as a driver on the policy.
By all means, call your agent. Your insurance will definitely go up, but it will be far cheaper than if your, uh, his son owns his own car in his own name and has to buy his own, separate, insurance policy.
As someone with not one but three teenage drivers in the house I can tell you with some certainty that the chance of a 16 year old (male or female) completely avoiding all accidents is about the same as Cecil popping in to post his 2 cents worth – i.e., it’s possible by highly unlikely.
I can also report with some certainty that if you have teen-age drivers in the house and you do anything to hack off your insurance company, they will courteously inform you that your policy is being canceled and you will be forced to find an insurance company that charges premiums considerably higher than $1,000,000 every six minutes.
Don’t ask how I learned all this. But belive me, I’ve learned it.
When I was a teenager in NJ, the insurance company sent out a form once a year to have us update the ‘driver list.’ Before they sent out the update, but after I got my permit and license, I was insured under my parent’s insurance, and their rates had not yet adjusted.