You.Must.Add.Them
A very common misconception is that your insurance covers your car, regardless of who is driving that car. This is incorrect, the insurance follows the drivers listed on your policy. When your teen gets their license, they do need to be added to your auto policy.
In New York State everybody that has a driver’s license that lives in the home where the car is garaged, needs to be listed on the policy.
Your insurance carrier rates your policy on risk, and the amount of risk in your household.
More drivers and more cars = more risk.
Unfortunately, when adding someone with no driving record, the price does go up, as their risk is unknown. Once they have some driving time under their belt, the policy cost will usually go down, pending no tickets, accidents or claims.
So what happens if you don’t add them?
If your new driver gets into an accident or has a claim there is a very good chance the insurance will not pay out the claim. They may, but if they do, they’re going to drop the whole policy. If it is a large claim the carrier does have the right to deny the claim. When you sign for your policies, there is specific language asking if you have added all licensed drivers in your household to your policy. If you answer yes, knowing you have a driver you have not added, they have every right to deny the claim.
You can get a new policy with a different carrier once you have been dropped, but now you have a claim, and a drop. There is more risk, and your price will go up significantly.
You are also setting up your child for very expensive insurance when they go to get their own insurance if they have never been on a policy. Even if they have no claims or tickets, if they go to get insurance by themselves at 26. They have been driving for 10 years, but have 0 insurance record, they will be placed as a higher risk and the rates will be extremely high.
What can you do to soften the blow?
- Safety driving course – this is the one usually required to get their license, submitting proof this was completed can take money off your policy premium.
- Once your teen is licensed they can do an additional 6-hour defensive driving course. This isn’t just for new drivers, all drivers on your policy should take this course. Once completed it can save you around 8-10% on your policy. Course has to be taken every 3 years.
- Good student discount. By submitting their transcripts if they have a “B” or better GPA they could qualify for a discount. This is for high school and college students.
- If your teen decides to go to away to college there is a discount for the student if they are away at school (more than 100 miles from home) and DO NOT have a car on campus with them.
- Bundle your policies! By keeping your home, auto and umbrella policies all with the same carrier you could qualify for a bundle discount.
Kids are expensive, we get it. But when it comes time to add a teen driver to your policy, make sure they are covered and set-up for success! They will be off your policy before you know it.
