A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 18, 2021

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Here's what you need to know...

  • Auto insurance policies have specific provisions stating that all household drivers must be listed on the policy
  • With a majority of companies, drivers can only be rated when they have a driver license
  • It is typical for companies to provide automatic coverage while a teenager has a provisional permit
  • Be sure to advise your agent that you have a teen who is over the age of 14 in your home so that the company knows you are disclosing all risks
  • As soon a child in the home is licensed, they need to be added to the policy and rated as a driver

Parents typically don’t look forward to their children growing up. They especially don’t look forward to their little ones turning into teens who can legally drive. According to statistics, teens are the most dangerous threats behind the wheel followed by seniors with slowed reaction times. Because of this major fact, it can cost a small fortune to add your teenager to your auto insurance policy. Compare car insurance rates now by using our FREE tool below!

It can be tempting to put off adding your teen to your policy for as long as possible, but doing this for too long can lead to some serious financial issues. If you’re unsure as to when you need to add your newly licensed driver to your policy, it is important that you educate yourself on the terms and conditions of your contract. Taking time out to learn your rights and your duties as a policyholder can help you avoid ever having an uncovered claim.

Duty to List Drivers In the Household

One of your duties, when you buy car insurance is, to be honest, and forthcoming when asked for information. Each and every time you buy insurance, the agent will ask you who has access to your car and who lives in your household. You’re expected to name every household member and regular driver at that time and to update your policy when anything regarding household members changes.

Just because you mention that someone lives in the home doesn’t necessarily mean that the individual will affect your rates. Peopling in the home can either be rated drivers or

Peopling in the home can either be rated drivers or deferred operators who are named by the policyholder. Knowing the difference can benefit you in the long run.

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What is the difference between a rated driver and a deferred operator?

  • Rated Driver: A rated driver, or primary driver, is an operator who regularly drives one of the vehicles listed on the policy. Since they are a risk, the company will use the driver’s age, experience, driving record, and occupation to calculate a premium.
  • Deferred Driver: A deferred driver, or sometimes called an unrated driver, is an operator who lives in the home but who doesn’t drive the covered autos. Unrated drivers often have their own vehicles and their own insurance policies. If they happen to drive the vehicle on the policy, coverage will still be afforded. First the driver’s coverage will pay and then the coverage under your policy will apply.

What happens if you fail to list drivers?

If you fail to name a rated or unrated driver, it could have a dramatic effect on your coverage if you ever file a claim. Because the contract says that you’re required to name household members and all drivers who have access to your car, the insurance company has every right to deny your claim when it’s filed. It’s also possible that the company can terminate your coverage with very little notice for material misrepresentation.

Do you have to mention minors living in the home?

It might sound silly to mention that you have kids in the home that haven’t even thought about driving, but some companies require this. It’s common for an agent to ask about all household members who’re above the age of 13. This helps the company set a reminder to check on the licensing status of teens as they age just in case you forget to update your policy at your renewal.

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Do you have to pay to add a teen when they have their permit?

In many states, teens who don’t have experience operating a vehicle must take classes and hold a provisional permit before they will be eligible to take the driving test. It might be a surprise to learn this, but most companies provide automatic coverage to teens who have their learner’s permit under the parents’ policy. With these companies, a driver with a permit isn’t seen as much of a risk because they must drive under the supervision of a licensed driver with experience.

Are there states where permitted drivers can be added?

There are states that allow companies to require their policyholders to list teens with permits. It’s even possible that the company can start to charge for a household member when they reach a certain age. While the state law allows this, it doesn’t mean that all companies that operate in that state will actually charge for drivers with their learners permit. The states with laws that allow listing requirements for teens who reach a certain age include:

  • Illinois
  • Indiana
  • Maryland
  • New York
  • North Carolina
  • Ohio
  • Pennsylvania
  • Virginia
  • West Virginia

What happens when your teen is licensed?

When your teen passes the driving test and officially holds a license, they must be listed to your policy regardless of the state you live in. Insurance companies take this requirement very seriously because of how likely teens are to have an accident.

Companies must charge adequate rates and they can only do this when you advise them that there’s a newly licensed driver in the home.

If you don’t list a newly licensed driver, there’s a good chance any claim you file will be denied.

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Teenage Car Insurance Rates

Teens and auto insurance don’t get along. At least in the sense that teenage rates tend to be very high. All car insurance rates are based on risk, and when a driver is in a risky rating class, they pay more for coverage even if they have a clean driving record. The statistics say that drivers between 16 and 19 are the most expensive to insure. Here are some tactics to try to keep rates low:

  • Get a good grade discount
  • Add teens to an established policy
  • Reduce mileage
  • Buy a safe car
  • Shop around with several companies

Shopping around for coverage when you already have a policy might sound like a hassle but it’s a hassle that’s worthwhile. By seeing what other carriers charge, you can see if you’re getting the best deal in the marketplace. The most effective way to do this is to use an online tool that directs you to dozens of quotes. Once you do this, you can educate yourself and purchase the best policy for the family. Enter your zip code in our FREE tool below to start comparing car insurance rates now!