Most people know that it is very expensive to insure a new driver.  We were all teenagers once and know that sense of confidence and infallibility can lead to an accident.  That is why the NH Car Insurance rates for teenage drivers are significantly higher than the general population. 

What If I Don't Tell My NH Car Insurance Company About My Teen Driver?

Because of the cost to add a youthful driver to your NH car insurance policy, you may be tempted to wait a little while.  You have heard that the premium can go down with each year of driving experience, so what is the actual harm if you wait a couple of years? The chances of your son or daughter getting into an accident are slim... right?

What If I Don't Tell My NH Car Insurance Company About My Teen Driver?

This is NOT a question we hear frequently at HPM Insurance, because people who avoid the question often don't want to know the answer, so avoid asking it.

We may occasionally hear from the client who is upset that an insurance company pro-actively added a young driver onto their policy without their permission, or the company went back to the date the young driver got licensed and sent them a bill for the premium difference.

How can my NH car insurance company find out about my teen driver without me telling them?

Insurance companies rely on C.L.U.E reports (Comprehensive Loss Underwriting Exchange).  This is a claims history database generated by LexisNexis that enables insurance companies to access consumer claims information when rating a car insurance policy.  If a report is run and someone is flagged as living in your household (whether a young driver or not), the insurance company may add them to your auto insurance policy.

To get the driver removed from the policy, you would most likely need to prove that the driver no longer lives in your household or has their own insurance policy.

Why should a company charge for a young driver?

The probability of an accident is significantly increased with young and inexperienced drivers.  The National Safety Council statistics reveal that drivers in the 16-24 age group account for nearly 1/3 of all auto accidents and fatalities.

What would happen if my teenager, who was not listed as a driver on my NH car insurance policy but lives with me, was involved in an accident?

This can be a gray area and depending on the circumstances, you may have coverage, partial coverage, or no coverage. It is strongly advised that you consult with your insurance company for the specifics of your policy.

If your child is newly licensed, the company may be willing to back-date coverage and charge accordingly- but that is a big if.  There is not a specific amount of time that you can "get away" with not listing your child. We have seen as insurance agents that if your child were licensed on a Friday and had an accident over the weekend, the company would most likely cover the claim based on timing.

As a member of your household,  your son or daughter is usually considered an insured under your policy and entitled to coverage as the policy indicates.  If a young driver is not reported to the auto insurance company, the insurer is entitled to all unpaid premiums upon receipt of a claim.  Depending on how long the driver was licensed, but not rated, it could be a lot of money to pay all at once.

Suppose, however, that it was determined that you intentionally withheld driver information.  In that case, it could be considered a "fraudulent statement" and the company may attempt to deny the claim entirely or pay the New Hampshire Financial Responsibility minimum limits which are bodily injury of $25,000 per person/$50,000 per accident, and $25,000 property damage. 

The simplest way to ensure you have coverage for your newly-licensed driver is to add them to your insurance.  It is also recommended that you review your liability limits and increase them if not enough to protect your assets now that your financial well-being is no longer completely within your control.

Do I need to keep my child on my NH car insurance if they are away at school?

In New Hampshire, insurance rates are calculated to include young drivers residing in an insured's household and young drivers while away at school.  For more information about children away at school, please read a prior HPM Insurance blog called How Your Graduate Impacts Your Car Insurance.

What you can do to save money when adding a teenager to your auto insurance policy:

The best thing you can do to save money when adding a young driver is to consult with your insurance professional before you add a young driver.

I will never forget the call I received from an Amherst client who called me after they allowed his 16-year-old son to buy a brand-new car.  He called after all the paperwork was signed at the dealership only to find out that the monthly premium was much more than the monthly car payment.  Ouch!  If we had received this call prior to the purchase, we could have advised him on how the car should be registered and insured before the paperwork was finalized.

You will also want to notify your insurance professional if your son or daughter is an honor student. This can add a significant credit to the auto policy, as would driver's education.

Why you should add your new driver to your car insurance policy:

As the saying goes, there is no such thing as a free lunch.  If your son or daughter were involved in an accident, you would expect the insurance company to pay.  This increased exposure is not free and can easily catch up with you.  It may end up costing you more money and frustration than if you simply called your insurance representative once the new driver was licensed.