We hold all our policies (auto, condo owner, rental unit, HOA, umbrella) with State Farm and have for years. We live in San Francisco. Some of our plans are unique, hard to find and required by our mortgage lender. It would be hard to re-create the packages and types of insurance we have given how many insurers have bailed on California.
When my child got their license a few months ago, I notified our agent, assuming our premium would go up massively and crossing fingers. But she eventually said they did not need to be named on the policy! It sounded shady—none of our friends had been told that by their insurers!—and I pushed back, but she was very insistent. I kind of made her put it in writing in an email, but I still feel extremely uncomfortable and legally exposed if our teen is not named on the policy; so called “permissive use” seems like such a gray area in California law and insurance claim practices. This child is a rising 12th grader and lives in the family home. We have one car.
I’m not 100% sure what would motivate her to refuse to put them on the plan by name, except maybe fear that raised premiums would drive away our business?
We have an older child away at college with an alternate address who will be living with us this summer and driving the car as well. They are also not named. We have one car.
I know it’s wimpy of me, but the agent got very testy when I pushed back and I don’t feel like I have the mind space to deal with any more stress – our family is dealing with unemployment at the moment – so any advice appreciated.
I want these kids named on our plan but I don’t want to reinvent the wheel with our mess of complex policies.
CA/State Farm: New teen driver covered under permissive use or not?
byu/mountains_of_nuance inInsurance
Posted by mountains_of_nuance
15 Comments
He should be named on your plan.
Permissive use coverage is very limited and not for household members, especially your teenage children, who gave regular access to the vehicle and/or drive it regularly. Permissive use of for someone not living with you borrowing your car for usually no more than a day or two a month. Good on you for getting your agent to put that in writing, but you still should add your teen as a rated driver.
SF notorious for advising households like this. Ask for documentation, emails to cover your butt.
Licensed household family members are required to be named on a policy in 50/50 states.
I’ve seen that age old angle some agents use, and the only benefit I can think is like you described, saving you money aka saving your business by not listing a youthful driver and trying to get you a freebie under the guise of “permissive use”. But being frank, you know they drive, they know they drive, and in the event of a claim you’re taking that risk of denial. I mean sounds like the agent even kindly put it in writing for you so the company could easily find the source of the misrep.
tldr: you’re gut instinct is correct.
Typically, permissive use applies to someone who does not have regular access to your car – like a relative who is just visiting or a neighbor who borrows your car in an emergency. Someone who lives in your household, whether they are related to you or not, is considered someone to whom your car is “furnished for their regular use”.
I honestly don’t know for sure about your college student. If you call the 800 number for State Farm service, I doubt anyone there would try to talk you out of adding any drivers to your policy. Especially not on a recorded line.
They need to be household drivers, but they don’t need to be named insured. Named insureds are supposed to be vehicle owners and spouses for the most part. It gets messy when there is a claim payment and no joint account.
As mentioned before, make sure you notify them in writing. It’s a condition of the policy to report new drivers. They’ve been lax in the past, but it’s only going to get more strict in the future.
You’re playing with fire, but if you have the agent’s clear and unambiguous position about the requirements of the policy in writing, that’s a good start. Just review what the agent put in writing with a critical eye and make sure it actually says what you think it says – you want no wiggle room for the agent to say you said something you didn’t (or vice versa). Also, with the older child coming home, you have an opportunity to write an email to the agent saying something like:
“XXXXX is returning home for the summer and will be driving the car, just like YYYY, and of course, me and ZZZZ. It’s just the one car among the four of us. Please let me know if this changes anything with respect to our policy, coverages or premium, or if any updates are needed, and if you need anything further from me. If nothing changes r needs updating, please let me know that as well.”
You want to create a crystal clear record of full disclosure to the agent (which equals full disclosure to the insurance company) and if the agent wants to stick their neck out and tell you the policy doesn’t need to be changed, so be it. There’s a pretty strong argument that the insurer is bound by those representations and couldn’t deny a claim based on you failing to list additional drivers.
What may happen is that SF auditing/underwriting will see the new license for the same address and add your child/children to the policy despite what the agent says. And they could do that months from now and back date the premium increase to the date of licensure.
Laws may differ from state to state, anyone that drives your vehicle with your permission is covered as you are. If someone is driving on a regular basis they should be added as an additional driver….
FL state farm policy. I didn’t add my daughter to policy and she had an accident. They covered claim but I had pay the added AMT for the 8mo she was driving that they didn’t know about. $200 a month so $1000 I didn’t plan on. After that she paid her share. This was years ago I’m sure much more expensive now to add 18yo to policy
For coverage purposes, they would be considered covered because they are a resident relative. But your agent is being stupid and playing with fire. They should be added as a driver to your household, which will increase your rates. This could be considered rate evasion. You should probably get a new agent.
Thanks for everyone who has weighed in thus far. How would you recommend I phrase/approach at this point? I did notify via email of new driver, then was given assurances of no need to name and attitude upon pushback. Now months have passed and she thinks she satisfied me. I will not threaten to take business elsewhere bc honestly they’ve been great about claims and service in every other area (we had a car stolen and homeowners claims).
I honestly don’t even know how to make her add/quote the high school kid at this point! She initially said it would be “about 2k” before coming back with “good news you don’t have to add him!”
Anyway, should I email again, call and talk to someone else, visit the office in person…?
“It is neither a good idea nor legal for a teenager to drive a car without insurance. All licensed drivers in the household should be listed on your auto insurance policy to ensure proper rating and coverage apply. Permit drivers should also be listed even though they will not have impact on premium until fully licensed. If your teenager does not have a vehicle designated as their own, he or she should be added as a driver on their parent’s policy.”
https://www.statefarm.com/insurance/auto/car-insurance-for-teens
I’m not in CA but this is the advice I would give to someone in my state – You need to add your teenage driver as an “assigned driver” on whichever vehicle they will be operating. That way they are rated on that vehicle and yes the rates will go up. You don’t have to add them as a named insured on the policy though, that’s typically only for registered owners of the vehicle. Otherwise, when you have to file a claim where your teen was the driver at the time of accident, State Farm would come back to your agent and ask them to collect all driver info and update policy if they are a household driver.
Yikes. Can you just make the additions online and avoid the agent? Both kids definitely need to be named on the policy and your rate will likely triple.
The agent is wrong – they both need to be listed drivers on the policy.
In addition to the misrepresentation, it’s doing your kids a huge disservice by not having an insurance history prior to them being on their own. When they eventually do so, their rates would be outrageous.