Do I *have* to put my son on my car insurance?

May 21, 2009 2:25 PM

How mandatory is insurance for a family member with a license who won't be driving...?

When my son got his learner's permit, I called up my broker and asked him about car insurance. He said, "While he is on his permit, your insurance will cover him already. Once he gets his license, you must add him to the policy which will cost some."

So, my plan was not to rush my son to pass his test - he doesn't need to be driving much.

However, he turned 18, went and passed his test, and went directly to the DMV to get his license. Didn't even pass GO on the way. His view was, "I won't be driving - so don't add me to the insurance."

Predictably the broker said, "If he lives in your house, and has his license, you have to add him to the insurance. Oh, and it will be $975 for six months."

Is this a legal requirement, part of the company's policy (which I can't find anywhere), or just the broker blowing smoke?

(Jurisdiction = Connecticut)

posted by blue_wardrobe to work & money (34 comments total)

If he ever drives your car -- at all, ever -- then he needs to be on the insurance. Because he lives in the same household, he won't be an occasional driver covered by your policy.
posted by jeather at 2:31 PM on May 21

In my experience, although this is in California, if you have a licensed driver over 18 that lives with you, they need to either be added to your policy, or specifically excluded from your policy, meaning that if they do drive your car and there is an accident, you are not covered.

Is that an option that was offered by your insurance company?
posted by pazazygeek at 2:36 PM on May 21

Your broker is correct. Insurance underwriters require all licensed individuals in a household to have insurance, either theirs or someone else's. If it's with a different company, they'll want proof of insurance. If you don't do this, they can decline to renew your policy upon your next renewal because they won't be bringing in enough premium to underwrite the risk to which you expose them. The law permits them to do this. In fact, the law requires them to do this, as insurance underwriters are heavily regulated by state insurance commissions to ensure that they are collecting sufficient premium to cover their insureds' risks.

Why? Because your son will be driving. Even if it's only once a week or once a month, you can't say with any credibility that he will never get the keys. No one will or should believe you. Hence the requirement that he be insured, either on your policy or someone else's. Granted, having him on his own policy involves getting him his own car too*, so that isn't likely to be cheaper.

There is theoretically a way around this, but it isn't one you want to take. Some insurance companies, not all mind you, will permit you to file an affidavit with them essentially swearing that your son will never drive your vehicle. If he gets in an accident in your car they'll refuse to pay the claim and drop you at the end of your policy period. If they somehow learn that he's driving, they'll probably drop you too. This is not really a good idea.

Don't bother fighting here. This is just going to be expensive. Feel free to shop around, lower your limits, raise your deductible, whatever, but you aren't likely to be able to avoid having him on your policy.

*Auto policies technically cover vehicles, not drivers. Underwriters require that all drivers in a household be on the policy to ensure they have your policy in the right rate structure, but the coverage is really for Car A, which Driver 1 commutes with and Driver 2 drives occasionally, and Car B, which Driver 2 commutes with, etc. Because you cannot insure a vehicle you do not own, your son cannot get his own auto insurance policy without a vehicle to go with it.
posted by valkyryn at 2:37 PM on May 21

This applied in Pennsylvania, even when I was living part-time in Maryland as a student. Your best bet is to say, "Thanks," and drop the hint that you'll be shopping around with other carriers. If they want your business, they'll negotiate.
posted by Blazecock Pileon at 2:43 PM on May 21

My mother was in the same situation with me, and basically asked me to wait a couple weeks past my 17th birthday to get my license, so she could say there weren't any other licensed drivers in the house. By the time the policy was up for renewal again a year later, I was off at college.
posted by Oktober at 2:49 PM on May 21

It is the rule, and not a bad rule, for the reasons noted above. If you can't find a good rate, your son should give up his drivers license. It will be a good lesson in financial responsibility.
posted by MattD at 2:54 PM on May 21

Even if it's only once a week or once a month, you can't say with any credibility that he will never get the keys. No one will or should believe you. Hence the requirement that he be insured, either on your policy or someone else's.

Just a nit to pick.. in the UK (and potentially the rest of the EU), they must and will believe you, though non-business car insurance there is based on a person and vehicle, tied. In a purely ethical sense, there is no good reason for a person to pay to be insured to drive a vehicle they will not drive - but the US car insurance system seems to have invented some nice red tape to charge Americans many times more for car insurance than us. I guess what I'm trying to say is: I'm surprised, this sucks for you guys and someone should considering fighting it one day :)
posted by wackybrit at 2:58 PM on May 21 [1 favorite]

Solutions:

(1) Force him to move out (he's 18)

(2) Force him to relinquish his license (he's 18 and so is responsible for his actions)

(3) Force him to reimburse you for the expense.
posted by dfriedman at 3:01 PM on May 21 [1 favorite]

I live in CT. While I had Progressive, I had to explicitly exclude my partner, who is a licensed driver who lives with me, because it was already costing me an arm and thank you I will keep my leg. Now that I switched to some AAA based insurance that isn't costing me as much (I got an elbow back) I let him be included.

That being said, he should probably be insured, since you can't be sure he's not going to drive anything, ever. I wonder if it would be possible to get him his own policy and then exclude him from your own.

Regarding "Because you cannot insure a vehicle you do not own, your son cannot get his own auto insurance policy without a vehicle to go with it."

Not true with Progressive, somehow, in CT. I didn't technically own my car until last year; it was in my parents' names and I paid Progressive my arms each month. My primary reason to switch the title to my own name was to get a cheaper policy somewhere else. AAA was super helpful in explaining this stuff to me. (Hamden > Branford.)
posted by cobaltnine at 3:08 PM on May 21

Don't forget to take advantage of good grades discounts if he is still a student (and his grades are good). Also, this might be a good time to look for a new car insurance company.
posted by halogen at 3:17 PM on May 21

If he is going away to college, even if it's local, and will be living on campus, you might be able to get a lower rate based on his not being in residence in your home 12 months of the year. Otherwise, you're stuck. My daughter is OVERSEAS, but because her permanent address is our house, if we want her to be able to drive when she's home we have to keep her on the policy. Sucks, but not as bad as paying out of pocket for an accident.
posted by nax at 4:17 PM on May 21

When I was living under the same roof as my brother, who had a ridiculously marred driving record, we both had to sign a form stating he would not be driving my vehicle.

When he lived under the same roof with my parents, same deal.
posted by jerseygirl at 4:34 PM on May 21

Move to Canada. I've never even heard of such a thing. In the two provinces I've lived, either everyone has coverage as an occasional driver, or your policy specifically states who is allowed to drive the car and doesn't care who lives at what house.

In your position I would check back to see if he can be specifically excluded. Or, barring that, how much would it cost to get a real piece of crap scooter second hand and get him licensed on that? If it's less than the $975 for six months (or whatever it will be ongoing if your son is at home longer), that might be an effective workaround.
posted by barc0001 at 4:46 PM on May 21

When I was living with my parents and driving my own car, they were given the option to add me to a list of guaranteed non-drivers, meaning that they signed a paper that said I lived with them, but I would not be driving their car at all.

This was in Pennsylvania, I believe with Progressive. Ask your insurance company if it is possible.

Your son will not be covered while driving your car unless he has his own insurance.
posted by qvtqht at 5:08 PM on May 21

Seconding cobaltnine. See if you can get him excluded from the policy. If your insurer won't do it, a different one probably will. (And, of course, make sure he never drives the car.)

You can insure a car you don't own, so he might be able to get his own policy. I do not own my car (my parents do--never got around to changing the title), but I have insurance for it. But then again, I don't live in the same household as the owners, and they do not themselves have a policy on the car, so your situation is a little different. Worth looking into, though.
posted by equalpants at 5:11 PM on May 21

IAAIA. But not yours. Your broker is right. Anyone living in the house who is licensed, but not insured, has to go on your policy.

Your options are as follows:
a) Your son moves out.
b) Your son gets his own car and insurance.
c) Your son relinquishes his license back to the DMV.
d) He pays you the cost of him being on your policy.

You can shop around (and I completely encourage you to do so), but the fact of the matter is that you are now responsible for an extremely wet behind the ears driver, and it's going to cost you.

Some companies will exclude a driver, but not many, and it's highly unlikely they will exclude an 18 year old (they want that premium - but feel free to ask and see if someone will do it). The reasoning behind including uninsured-but-licensed drivers is that there is absolutely nothing stopping him from grabbing the keys and running to the store for a moment (with or without your permission) and getting into an accident on the way for which the insurer will be responsible. He will be driving your car, be it once a month or twice a year, and he is extremely high risk* - and unfortunately, you'll have to pay like he is.

*not to say he's a bad driver, but he's inexperienced, and yeah, very likely to make a mistake.

And no, you cannot insure a vehicle you don't own. There'd be nothing stopping me from insuring my neighbors car because I felt like it, and cashing in on an accident. Either the company did something shady or they weren't fully aware of the situation, but legally you cannot insure something that is not yours. Exceptions are made for same-household situations (usually called spinoffs, and they are sometimes forgotten about and left to linger), or someone missed something big time, but as an agent I would pluck out my eye teeth before I insured something that belonged to someone else.
posted by sephira at 5:21 PM on May 21

sephira addressed it, but in really fine print. This is really important, so I'm going to say it clearly:

equalpants is flat out, dead wrong.

You cannot insure a car, or anything else for that matter, which you do not own. equalpants thinks he has his vehicle insured, but he doesn't: if he ever has to file a claim, and his insurance company learns that the title is not in his name, they will deny the claim and cancel the policy because he does not have an insurable interest in the vehicle. If they somehow learn that the title is not in his name, they'll cancel the policy immediately without waiting for the term to expire.

Insurance companies insist upon insurable interests because otherwise there's a huge moral hazard. If you insure your own vehicle and wreck it, you get some compensation intended to move you as close as your policy allows to where you were before: you basically lost the car but gained a roughly equivalent amount of money. But if you take out insurance on someone else's vehicle, wreak it, and then get money for the claim, you have more money than you started out with, i.e. you started with nothing but an insurance policy and now have money. Which creates a massive incentive to take out insurance on other peoples things and then create losses.

This is called "insurance fraud," and it's a serious crime.

This is just about the first thing that an underwriter is going to want to know when writing any kind of policy. They're more careful about this than they are about just about anything.

Most of the above posters are correct in that you can probably get your son excluded from your policy, but you do need to recognize that this really does mean he cannot drive your car. If he gets pulled over and they ask him for proof of insurance, he won't have any, meaning fines, etc. If he wrecks your car or injures someone, you're on the hook for 100% of the damages, can probably be assessed significant fines, and will almost certainly have your insurance policy dropped. So unless he doesn't want to drive at all, you need to add him to your policy. No two ways about it.
posted by valkyryn at 6:22 PM on May 21 [1 favorite]

My brother did the same thing as your son, but our parent were strict in the. "You will never be driving our cars, get your own if you want to drive something" policy.

They just told their broker my brother didn't have a license and went on about their day. Nothing bad happened because he never ever ever drove either of their cars. And yes, their guy said he just had to be on the policy if he was licensed. This was in PA.

I'd say don't tell the guy, how is he ever gonna know? Unless you already told your broker. Or if you actually think your son might be driving your car.
posted by Attackpanda at 7:06 PM on May 21

equalpants thinks he has his vehicle insured, but he doesn't

Well, I'll give you the benefit of the doubt, but I'd like to hear where your information is coming from. My parents are listed on my policy as the owners. (Yes, the actual policy from the insurance company, not just some document from the broker--I dug it out just now and checked again.) Perhaps my broker lied to me from day 1 in order to sell me a worthless policy, but I don't know--they're a pretty reputable company.
posted by equalpants at 7:48 PM on May 21

You got me scared, so I went looking around the internet. I've seen a few people saying "absolutely no insurance if you're not the owner", and a few people saying "most companies won't do it, but some will". Here's a couple of examples of the latter:
-one
-two (scroll to comment #7)
The second example matches my experience (also in CA), since my broker didn't offer me plans from any of the big companies.

Are these guys wrong? If so, could you explain what they're wrong about? (I'm not trying to be combative, I'd just like to get to the bottom of this.)
posted by equalpants at 8:34 PM on May 21

Where I've lived (Chicago, California) you can also have him excluded from the policy, explicitly -- meaning that the policy calls out him not being covered when he drives your or any other vehicles.
posted by davejay at 9:13 PM on May 21

In summary, he will have to be added to your policy or specifically excluded from the policy as long as he's living in your house and has a driver's license.

He could also research non-owner's insurance to cover those instances when he wants to drive occasionally.
posted by GPF at 9:43 PM on May 21

As for the person in the household with a license who won't be driving the car, I went though this with Geico (OH) who kept calling and demanding info for my then-husband's temporary permit, even though I said he would not be driving. It got to be such a hassle, I just cancelled Geico and went with another company, and fibbed about who resided in the home. Certainly not advising anyone else to do this, I was just fed up, and I was 100% certain that he wouldn't be driving my vehicle.

As for the equalpants scenario - I just went though this (albeit in Ohio) as well. They do random checks here via letters sent to the car owner, asking for confirmation of current insurance on the vehicle in the owner's name. If this is not in force, then the registration is revoked, and they demand the plates back.

When I looked into someone getting insurance for a car that I owned but was willing to let them use, I found out the above, plus this fact - you have to have insurance to drive, and you can't insure a car you don't own, as has been said above. What insurance you get is pretty much an SR-22/non-owner bond, is liability only, and is merely designed to be in addition to the owner's coverage on the car.

While the car you're driving may be listed on your policy, this may just be extra info for the insurance company for determining your policy cost. I would get your parents to call a couple of different auto insurance providers and get their take on the situation, including the one you're currently with.
posted by HopperFan at 11:00 PM on May 21

there is absolutely nothing stopping him from grabbing the keys and running to the store for a moment

...there's nothing stopping him doing that even if he gives his license back to the DMV, he still knows how to drive. If not having insurance wouldn't stop him taking car out then why would not having a license?
posted by missmagenta at 12:28 AM on May 22 [1 favorite]

equalpants, I worked at an auto P&C company in 2004 and now work for a commercial insurance company which writes auto coverage as part of its casualty product. That's where I'm getting my information.

In your case, given the new information in your last post, it doesn't seem that you're wrong as much as you misunderstand what's happening. Yes, it does seem that your vehicle is insured. But by your parents, not by you. Sure, you're paying the premium, but because they're listed on the policy as owners--which they have to be, because they technically own the car--if there is a claim filed, they'll get the money, not you. Also, if you cause damage in excess of your policy limits, they'll be liable for the excess, not you (see your second link) because the policy is theirs, not yours.

The reason for this is that auto insurance follows vehicles, not drivers, i.e. you can't get auto insurance without a car. But what most people don't realize is that if you borrow someone else's car and get in a wreck, their insurance is implicated, not yours. Likewise, if you lend your car to someone else, you are also lending them your insurance. So what you've got here is a situation where, in essence, your parents are insuring the vehicle but permanently loaning it to you.

The information on those links which suggests that it's up to the underwriter to decide whether or not they want to insure someone without an insurable interest is wrong. State insurance regulators would never permit such an arrangement, as there must be an insurable interest somewhere for the policy to be written. Not only will insurance companies avoid this kind of moral hazard like the plague, but it's almost certainly a violation of the regs. But regulators and some companies will permit the kind of circumlocutions described in those links, and of the sort which you have in place, i.e. a policy owned by an owner of a vehicle which is not housed at their residence and is used exclusively by a third party. This is messy enough that most insurance companies won't touch it with a ten foot pole--the insurance company I worked at in '04 wouldn't insure any vehicle not garaged on your premises*--but because you're technically insuring the owner of the vehicle, not the driver,

I'm guessing this isn't what you thought was happening, and I'm also guessing that this isn't actually what you want. I suggest getting your title cleared up next week, if you can manage it. That's the only way to fix this.

*Except for cars operated by kids at college. They'd have to ditch too many policies if they didn't allow this, but they didn't like it much.
posted by valkyryn at 5:31 AM on May 22

missmagenta, most insurance policies of all types don't cover intentional torts or criminal activity. So if you accidentally drive your car through the gas station, you're covered, but if you do it on purpose, you aren't. This is so that you can't go running down pedestrians and expect your insurance company to get your back.

In the same way, most if not all insurance policies are written in such a way that only licensed drivers are covered,because driving without a license is a crime, and auto policies won't cover criminal behavior or civil liability which arises out of criminal behavior. Under normal circumstances, if you lend your car to someone you lend them your insurance too. But if the borrower is unlicensed, you don't. They--and probably you--are on the hook for all of any liability which arises.
posted by valkyryn at 5:35 AM on May 22

equalpants, one last thing, in case it wasn't clear above. At the moment, you probably don't have any liability coverage at all. So if you crash into someone, both you and your parents will be liable, but though they have coverage, you do not.

You're gonna want to do something about that.
posted by valkyryn at 5:38 AM on May 22

...there's nothing stopping him doing that even if he gives his license back to the DMV, he still knows how to drive. If not having insurance wouldn't stop him taking car out then why would not having a license?

Sure nothing is physically stopping him, but the legality of it changes the situation. Legally he should be on her policy if he has a license and lives in the household, and if he doesn't have a license he should not legally be driving. So, if anything were to happen while he were driving the car, it would be illegal, and therefore not covered.
posted by sephira at 9:51 AM on May 22

Sure nothing is physically stopping him, but the legality of it changes the situation. Legally he should be on her policy if he has a license and lives in the household, and if he doesn't have a license he should not legally be driving. So, if anything were to happen while he were driving the car, it would be illegal, and therefore not covered.

Ridiculous. A kid driving a parent's car without permission is a car thief. It's just as illegal as taking money from your dad's wallet or hawking mom's jewelry (or driving without a license). All this fuss about "Well, the kid might still take the car" is a front for the real issue, which is insurers wanting more money. Write the son out of the policy and there's no exposure for the company.

Or just tell the insurer your kid gave back the license/moved out (something you can plausibly say you believed to be true). Worst case scenario is your son takes the car anyway, gets in an accident, and the insurer refuses to pay. You're in the same place you would have been if the insurer had just done the reasonable thing and written him out of the policy.
posted by the christopher hundreds at 12:44 PM on May 22

Just got off the phone with my agent, who confirmed the following:
-Yes, you can insure a car registered to someone else; "most" of the companies they work with allow it, as long as the registered owners are excluded as drivers. The agent was a little surprised that someone would consider this unusual.
-In some claims, payout might go to my parents, not me. (I was aware of this; they told me when I bought the policy.) In some other claims, payout might go to me--the example she gave was an accident where I was not at fault.
-Yes, I do have liability coverage, and everything else required by the state. This is a normal policy (not non-owner, liability only, or any other such thing). I am the named insured.

I am in CA; I have no idea how much of that is true/possible in any other state. In any case, there's been no misunderstanding--I was fully aware of all of this when I bought the policy. Nor did I say anything incorrect in my original post, unless the agent who I just spoke to and the agent who sold me the policy are both incorrect or lying.

So there's an impasse here, I guess. My agent disagrees with you. I'm gonna go with my agent, since they're a pretty large non-sleazy company, and they do business in this state. No offense meant.

To the OP: sorry about this derail. But hopefully this illustrates the importance of taking AskMe with a grain of salt!
posted by equalpants at 1:13 PM on May 22

the christopher hundreds: and most parents aren't going to press charges against their children for grand theft auto. The main idea behind doing this is so that there isn't a "But but but I have insurance!" lawsuit later on down the road, and in no way want to be on the hook for without being paid the premium. They are also looking out for their primary insured, because, let's face it, the worse case scenario is not just the son taking the car - it's the son taking the car, hitting a brand new minivan full of Girl Scouts, and everyone involved being severely injured the point of life-long disabilities or death. Now would you rather pay the bill for that accident or the monthly premium of having an inexperienced driver? Yes, it is a pain in the ass, but it is for a good reason. The idea is not just to fix your car after an accident, it is to protect you and your assets in the event of a catastrophe, because yes, you can lose your house, other vehicles, bank assets, etc due to a car accident. It's not a matter of "I'm going to write the son out of the policy so I can get them cheap coverage" but rather "how can I make sure they are fully covered?"

I didn't write the rules, I am just stating them. Yes, they vary from state-to-state and company-to-company, but even then they remain pretty consistent most of the time, and those rules actually have reasons other than "more $$".

Additionally, lying to the company and stating that he gave the license back or moved out when he didn't is called fraud, and I can't say that is good advice. It is also a good way to have your carrier drop your insurance completely. If blue_wardrobe is serious about not letting her son drive the car, then he should relinquish his license to the DMV until he's ready for his own policy, can pay the difference, or moves out since the cost seems to be the biggest factor.

equalpants' situation sounds more and more like the idea behind the "spinoff" policy that I stated before (not an industry term) and it usually only applies to parent/child situations where only the child (not the parent) is the driver of the vehicle (to make sure single coverage, as you cannot insure something twice). This is an incentive policy meant to keep families within the same company (thereby not losing premiums to other insurers).
posted by sephira at 1:57 PM on May 22

Well, thank you everyone. I'm not sure who to flag as best answer, so consider yourselves flagged, even the pseudo-derailers, because a) I learned a lot; and b) you apologized anyways! :)

I would like to think I could write him out of the policy, but the option we are seeming to settle on is that he will pay the whole premium, and learn not to go doing stuff without thinking through the consequences.

In this case, he decided to go for his test and license ahead of our agreed schedule because the day he took his test was the last day in CT you could get a test at a driving school instead of the DMV.

But now he has to pay the piper. Life lesson time!
posted by blue_wardrobe at 5:46 PM on May 22

equalpants, one final, minor quibble: if there's a "payout" where you aren't at fault, that isn't actually your insurance paying, it's the other driver's. So that's still in keeping with my main thesis, that the insurance policy is really your parents.

Look, unless I can actually get a copy of your declarations page, which it would be both crazy and a huge pain in the ass for you to send to me, I can't give a truly definitive answer. But I'm still pretty firmly convinced that my understanding of the situation is correct, even given the information you've passed on from your agent. It still sounds to me like you've got something along the lines of what I described. So yeah, there's an impasse.

the christopher hundreds: a child who drives their parents' car without permission is not technically a thief unless they intend permanently to deprive their parents of the use of the vehicle. Taking the keys without permission does not equal grand theft auto, even in theory, as it lacks the requisite criminal intent.

Insurance companies assume that unless they've got some kind of documentation to the contrary that all licensed drivers in the same household have permission to drive each other's vehicles unless they've got their own separate policies, particularly if the household is a family. It's not an unreasonable assumption either. Most parents I'm aware of would be annoyed but not too terribly upset if their kids took the keys without explicit permission in every instance, particularly during daylight hours. Most households operate under a kind of implied blanket permission for that sort of thing. If you want to opt out of that default assumption you can, but you generally have to sign a document which can be used against you if it turns out you're just trying to cheat the insurance company. The reason they require a document is because enough people simply said "Oh, my sixteen-year-old son will never be driving!" when of course he was, that there isn't really another way of handling it.
posted by valkyryn at 8:17 PM on May 22

Well, if you're convinced that you know more about my insurance policy than both me and my agent, then there's nothing I can do for you. You don't need to take my word for it; you can call up some CA insurance agents and ask them about such policies if you want.

I did think that, since I was so polite in response, you might apologize for accusing me of fraud. Guess not.
posted by equalpants at 2:32 AM on May 23