Adding a young driver to your policy can be one of the most fear-inducing experiences a parent can know, both because of the amount of increased premium involved, and the idea of setting the youngster loose on the freeways of the world. Once the young driver obtains a “learner’s permit,” they are typically covered under your policy as a “permitted driver,” without any additional premium charge. Keep them permitted on your policy for as long as possible, both because it is usually free, and because they will gain valuable driving experience.
Once they become a “licensed” operator, (and they will push for this as quickly as possible) you must add them to the policy as such. Your premium will increase substantially, usually between $ 70 and $ 300 per month, depending on the discounts you (and they) receive, and the type of vehicles/ coverages on the policy. Often it is just as expensive to add a cheap vehicle to the policy with the new driver, as it is to add the driver alone. If this is feasible for you, you will benefit because they will not be driving your nice, expensive, clean car around, and also because you can carry “liability only” on the cheaper car. In the event of an at-fault occurrence, simply walk away from the car and get another, instead of bothering with pricy repairs.
“Accident Forgiveness” can be a very valuable coverage to have on your policy at this point, for obvious reasons (see Coverages) so make sure you have it, if available, even if you have to pay for it.
Often, folks will call in to add the young driver to their policy as a permitted operator, then “forget” to notify their insurance carrier when the child becomes licensed. This may lead to the denial of a claim, because most insurance contracts contain language that clearly specifies that you must add them to your policy when you are required to do so. If you do not, you may have issues with claims being denied, or with the after-the-fact assessment of additional premium, all the way back to when the child first became licensed.
Make sure your child completes the driver’s training course, and if offered, the defensive driving course as well. These two discounts, along with the good student discount, can save you as much as $ 200 or more each policy term. (See Discounts).
Insurance companies typically use a process called “Additional Driver Discovery,” which is essentially a third-party service that scours driver’s license databases and cross-references them with addresses, to discover additional licensed operators living at your address, in your household. They especially focus on “Youthful Driver Discovery,” which is finding out about Junior and his freshly minted license, and requiring you to either add him to or exclude him from your policy.
If you do not want your child to be added to your policy, either because you don’t think they deserve to drive, you can’t afford it, or whatever, then do not allow them to become licensed in the first place. Do not sign off on the license. Once they have a license, if you want to avoid paying premium for them, you will have to complete a named, or “flat” driver exclusion form, if available in your state. Another option is returning (“ surrendering”) the child’s license to the local DMV, and submitting verification to your insurance carrier that you have done so.
▪ If you have a shared custody situation, and the child is already insured by the other parent, you will not have to add them to your policy, as long as you can provide verification of this coverage ▪
Keep in mind that adding young drivers to your policy greatly increases your liability exposure, and you will want your policy limits to reflect that.