Young Driver in the house - Insurance

[Thaco]

Asking for a friend....

16 year old in the house, if where to get his class 5, do i HAVE to tell insurance? does he HAVE to be added to the policy? and what am i going to be looking at for rate hikes?

[speedog]

Well you could opt to not tell your insurance company but just hope the 16 year old doesn't get into an accident while driving a vehicle he's not insured for. Or possibly get stopped by the police but in not sure if the police check insurance policies based upon the age of the driver.

If he's added to your policy then be prepared for a significant rate hike, as far as I know rates are based upon the most at risk driver. Now if you have less registered/insured vehicles than the number of drivers in the household then the rate hike won't be quite as steep.

[bjstare]

I'll be interested to see what Bill says.

[craigcd]

Pretty sure your insurance would extend to the driver. Same as if a friend was driving the car etc......

That being said I know some of my past policies stated that nobody under the age of 21(i think) is eligible to drive the car. I don't believe adding a young driver to the policy would make a huge difference in rate unless there was an accident.

[revelations]

Is there a significant benefit in AB to buy a really cheap vehicle to insure (eg. minivan) for a young driver? Our 10 year old minivan costs 333$ a year to insure (thanks bill!).... and we have 4 vehicles insured right now.

[ExtraSlow]

It's not the same as occasional lending to your friend. One of the questions you get asked is about other licensed drivers in the household, so by not telling your insurance that would be the same as lying to that question.

Don't know the best strategy, but don't just ignore it. Call. touchstone.

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Is there a significant benefit in AB to buy a really cheap vehicle to insure (eg. minivan) for a young driver? Our 10 year old minivan costs 333$ a year to insure (thanks bill!).... and we have 4 vehicles insured right now.

Insurance cost relates to car and driver, so that minivan and a 16 year old is going to be a lot more than when Its a spare vehicle for a 40 year old.

[max_boost]

Don't crash.

But most do at that young age.

[craigcd]

I have 3 insurance companies at the moment. Have never been asked about other licensed drivers in the house.

Regardless if your kid, your friend or whoever piles up your vehicle you are on the hook. If you have lied to them about other licensed drivers or have something that excludes drivers of a specific age you are going to have other issues.

[ercchry]

Pre-grid it was $400/yr for a secondary driver, I imagine that has only gotten cheaper

Does two things: 1. Starts the insurance history for the 16 year old (cheaper rates in the future when they get their own car) and 2. Covers your vehicle! Since kid is too young for most policies casual driver coverage, and also would be a huge issue since same household if you tried to claim anything under that coverage

[revelations]

I guess its a BILL question then - what is the optimal strategy in AB for a 16 year old driver to minimize insurance cost?

Obviously:

- cheap vehicle with PLPD only

But are there worthwhile savings from insurance from:

- drivers Ed ?
- more doors on vehicle? (or, specific vehicle classification)


One can assume that between 16-25 that there will be at least 1 at-fault crash. Pretty much everyone I know when at that age, had a small, or large collision - myself included.

[Thaco]

Well you could opt to not tell your insurance company but just hope the 16 year old doesn't get into an accident while driving a vehicle he's not insured for. Or possibly get stopped by the police but in not sure if the police check insurance policies based upon the age of the driver.

If he's added to your policy then be prepared for a significant rate hike, as far as I know rates are based upon the most at risk driver. Now if you have less registered/insured vehicles than the number of drivers in the household then the rate hike won't be quite as steep.

he obviously would not be driving if he was not on the policy

[Thaco]

I guess its a BILL question then - what is the optimal strategy in AB for a 16 year old driver to minimize insurance cost?

Obviously:

- cheap vehicle with PLPD only

But are there worthwhile savings from insurance from:

- drivers Ed ?
- more doors on vehicle? (or, specific vehicle classification)


One can assume that between 16-25 that there will be at least 1 at-fault crash. Pretty much everyone I know when at that age, had a small, or large collision - myself included.

Yeah we put him through insurance reduction eligible driver training, he wont have his own car because he doesn't have means to pay for it... i'd prefer he doesn't work so he can concentrate on schooling.
If i can just not tell them and my rates are unaffected then he simply wont drive
If i have to tell them reguardless and add him as a casual driver then he may be a casual driver and just borrow my car once in a while.

[Star1995]

RBC told me that if anyone driving my car that is not on my policy gets into an accident that is at fault will be treated as if I was the one driving and will be my fault, so I'll need to pay the deductable and face any rate hikes.

[corsvette]

RBC told me that if anyone driving my car that is not on my policy gets into an accident that is at fault will be treated as if I was the one driving and will be my fault, so I'll need to pay the deductable and face any rate hikes.

Interesting. I'm also with RBC and when my oldest turned 16 and got his licence they said I'd have to put him on as long as he is living at home. Basically if he has access to the vehicle (with or without permission) we had to list him. Never asked what if we don't though lol.

Ended up buying a 2007 Dodge Caravan dirt cheap and that's the teenagers van (I have two licenced drivers now). They both have one ticket each (17 and 19 now) and my renewal for the van PLPD was $680 this year. Both boys are listed as occasional drivers of that vehicle, no idea what would happen if they drive/got in a wreck in one of our other's.

[Thaco]

Interesting. I'm also with RBC and when my oldest turned 16 and got his licence they said I'd have to put him on as long as he is living at home. Basically if he has access to the vehicle (with or without permission) we had to list him. Never asked what if we don't though lol.

Ended up buying a 2007 Dodge Caravan dirt cheap and that's the teenagers van (I have two licenced drivers now). They both have one ticket each (17 and 19 now) and my renewal for the van PLPD was $680 this year. Both boys are listed as occasional drivers of that vehicle, no idea what would happen if they drive/got in a wreck in one of our other's.
yeah that's kinda what i figured, it'll be required to have him on as long as he's in the house, i just am not prepared for an excessive rate hike, what was the increase when your first kid was added?

[corsvette]

yeah that's kinda what i figured, it'll be required to have him on as long as he's in the house, i just am not prepared for an excessive rate hike, what was the increase when your first kid was added?

I got a quote for that van through another insurance co online a few weeks back. Not mentioning the teenage drivers; $419/yr, With the two boys added $816/yr. Got the van when 1st boy turned 16 and can't remember how much it went up adding the second kid.

[Masked Bandit]

There a few different angles at play here. If the kid ever, and I mean EVER drives the car you need to list him on the policy. Failure to do so basically puts you in a position of him driving with no insurance. If a kid that lives in the house smashes up your vehicle and they are not listed on the policy the insurance company has grounds to deny the claim which makes you (the policy holder and vehicle owner) personally liable for any and all damages & lawsuits. However, living in the real world, if he never touches the car, not even once then I don't know why you would bother listing them.

As for the cost there are many variables that can change that number dramatically. That is a conversation you'll need to have with your broker, hopefully off the record so you can decide how you want to play it.

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I got a quote for that van through another insurance co online a few weeks back. Not mentioning the teenage drivers; $419/yr, With the two boys added $816/yr. Got the van when 1st boy turned 16 and can't remember how much it went up adding the second kid.

I'm pretty sure I know how your policy would be set up to accomplish that and just a general public service warning, your insurance company will also have grounds to deny any claims the kids have with that van.

[Thaco]

There a few different angles at play here. If the kid ever, and I mean EVER drives the car you need to list him on the policy. Failure to do so basically puts you in a position of him driving with no insurance. If a kid that lives in the house smashes up your vehicle and they are not listed on the policy the insurance company has grounds to deny the claim which makes you (the policy holder and vehicle owner) personally liable for any and all damages & lawsuits. However, living in the real world, if he never touches the car, not even once then I don't know why you would bother listing them.

As for the cost there are many variables that can change that number dramatically. That is a conversation you'll need to have with your broker, hopefully off the record so you can decide how you want to play it.

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I'm pretty sure I know how your policy would be set up to accomplish that and just a general public service warning, your insurance company will also have grounds to deny any claims the kids have with that van.

Thanks, That's kinda what i figured... i don't mind listing him if its reasonable, just don't wanna mention it and then be required to list him if its a substantial cost difference that i simply can not afford.



also on the same subject, when he was a learner i didn't have to tell them ... would it be different once he has his class 5 license? would he still be covered if i am in the car with him driving just like before? I'd like him to still be able to gain experience even if he isn't listed.

[speedog]

also on the same subject, when he was a learner i didn't have to tell them ... would it be different once he has his class 5 license? would he still be covered if i am in the car with him driving just like before? I'd like him to still be able to gain experience even if he isn't listed.

Ummm, nope. Once he gets his class 5, you either have to get him listed on your policy or he buys his own vehicle and registers and insures that vehicle under his name. Either way, there's going to be some substantial insurance premiums to pay, basically you have to just suck it up and pay or get your kid to pay. Someone's got to pay for that at risk young driver

[Thaco]

Ummm, nope. Once he gets his class 5, you either have to get him listed on your policy or he buys his own vehicle and registers and insures that vehicle under his name. Either way, there's going to be some substantial insurance premiums to pay, basically you have to just suck it up and pay or get your kid to pay. Someone's got to pay for that at risk young driver

that's what i assume but since the insurance guru is here, i thought i'd confirm with him.

[Black Gts]

My understanding always was that casual drivers are covered so long as they do not live in your residence, and are not males under 25. (which is dumb because you can be penalized for being responsible and letting your buddy drive home if you're at that age) maybe call another company for a quote so you can't be impacted. You could always say he lived with a relative if you're into insurance fraud lol.

[speedog]

that's what i assume but since the insurance guru is here, i thought i'd confirm with him.

Just out of curiousity, who took the hit when you got your DL at 16?

My parents extended the premium cost to me to pay if I wished to drive and we did the same with our kids. One trick is to have less insured vehicles than licensed drivers in your household - if it's just you, your wife and your son and you only have two vehicles then your son will be an occasional driver. But get a third vehicle and now your son becomes a primary driver on one of those three vehicles.

[Thaco]

Just out of curiousity, who took the hit when you got your DL at 16?

My parents extended the premium cost to me to pay if I wished to drive and we did the same with our kids. One trick is to have less insured vehicles than licensed drivers in your household - if it's just you, your wife and your son and you only have two vehicles then your son will be an occasional driver. But get a third vehicle and now your son becomes a primary driver on one of those three vehicles.

i did everything myself, arranged with the registry, rented their car to do the test, bought my own $400 beater and worked damn near full time just to pay the $400/month insurance premium on my own policy.

My kid isnt working, at my preference, i'd rather him focus on schooling, i wish i had the option/support for schooling when i was his age, instead i was taking as many spares at school just so i could work to support myself.