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Can I get out of paying for my teen driver?


A

Question: Is it true that if a teen gets his driver’s license but puts a different address on the license, he can be covered by a parent’s car insurance policy without the parent being charged extra?  I heard this is a way to get around paying high rates for your teenage driver.

Answer: Having your rates skyrocket due to having a newly licensed teen in your house isn’t appealing to any parent, but the answer isn’t lying. 

If you truly can’t afford the teen driver to be on your policy, then either don’t let him get a driver's license or see if you can exclude him as a driver (though then he can’t drive your cars because he’d have no coverage). But relying on a technicality for cheap car insurance could come back to bite you in very expensive ways.

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First, each state mandates that the address on your license is correct. If your son placed a false address on his license and is caught, he could receive a ticket for having an improper address on his driver’s license. This offense in most states comes with a fine of $100 or more, and he would be required to correct his license.

Second, giving inaccurate information to your car insurance company to obtain lower rates is considered material misrepresentation, even fraud in some places.  (For example, see the Arizona’s insurance regulator’s “What is insurance fraud” document listing the high fines and even jail time you could receive in their state for such an offense.)

Third, if you give false information or misguide an insurer about who drives your car, or any of the other rating factors, then it can say there was misrepresentation on your part and (depending upon state laws) may be able to void out your policy, deny claims, even make you pay in full the premiums that you should have previously paid if it had known your full information.

Car insurance companies require that you give them specific information; such as who lives your household, so that they can determine the risks they are taking on and accurately calculate your car insurance premiums.

If your teenager lives with you, or doesn't live with you but frequently drives your vehicles, you are required to list him as a driver on your car insurance policy.  (See "What single parents need to know.") For a child that has moved out of the house and only comes back to visit occasionally, such as a student away at college, you need to check with your auto insurer to see if the child needs to be listed as a driver.

The bottom line is to be honest and upfront with your insurance company about licensed household members. The only thing lying on your teen's driver's license truly does is make his license incorrect.

What parents of young drivers need to do is shop around for the cheapest car insurance company for their new needs since their current insurer may not be the cheapest now that they have a teen driver. 

And ask for discounts.  Besides the normal discounts (multi-car, multi-policy and so on), parents of young drivers should ask about good student discounts and if there is any reduction in rates if their child takes a certain driver training course.  (See "A parent's guide to insuring a teen driver")

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