The Problem of Obtaining Car Insurance for a Child Who Resides Equally With Both Parents

Divorce presents special problems when it comes to insuring teen drivers. Teens today are likely to spend equal time with both parents. There are numerous combinations of persons of stepfamilies and alternative living arrangements as our ideas about the composition of a nuclear family continue to change. As a result, teens may have access to vehicles at more than one household Questions about liability and insurance coverage while a teen is behind the wheel of any number of potential vehicles mount quickly. Which of two separated parent provides car insurance? Is a parent, their new spouse, or boyfriend or girlfriend living in the household liable in the event the teen is involved in an at fault accident? What steps can be taken to protect your teen and yourself?

Understanding a few general ideas may help you to wade through the murky waters of auto insurance and liability protection where you are divorced and are responsible for a teen driver.

1. The Family Car Doctrine – When a teen is operating a vehicle that you own the teen or anyone else for that matter is presumed to be your agent. This means that if there is an accident, not only is the driver responsible, but you as the owner have liability as well as the owner of the vehicle.

Further, if the teen lives in your household, the parent-owner is liable to a person injured in an accident that is caused by the negligence of a teen driver to the same extent as the teen driving the car. This is called the “Family Car Doctrine.” The ex-spouse, living in a separate house, who has no ownership interest in the car that the teen is driving, is not responsible.

As you can imagine, there may be issues as to whether or not a teen was living primarily with you or with your ex-spouse. However, if you keep in mind that any person operating your car with your permission is acting as your agent and that you may have personal responsibility for an accident as the owner of the car, then the issue of where the teen resides may become less important.

2. Insurance First Follows the Car – A second idea to keep in mind is that liability insurance first follows the car that is being operated by the teen. In other words, the insurance on the car being operated by your teen is the primary insurance coverage. It offers protection to your teen as the operator. It covers you as the owner. Your teen may have other insurance that provides insurance coverage through your ex-spouses household where he might reside. This would be secondary insurance. You as the owner may have an umbrella or excess policy, which would also be a form of secondary insurance.

3. The Insurance Application is Critical- This is the point where these ideas come into play. The premium that an insurance company charges for auto insurance is based on the risk of the insured driver being in an accident. Assessing this risk begins with a review of the insurance application. When making an application for insurance it is critical to answer truthfully all of the questions. These questions will deal with your teen driver.

Commonly the application for insurance will ask the names and ages of all of the members of the household. The insurance company will seek information regarding any children of driving age living in the house. The application will ask whether or not the teens that are living in the house will actually be driving the insured vehicles.

Clouds of uncertainty can set in. Whether out of fear of a higher premium or with the thought does not spend enough time at your household or is covered under son or the other parent’s auto policy, may lead you to not disclose your child as a member of the household. Caution: if you do not disclose your teen and she or he is then in an accident while driving your vehicle, the insurance company may deny coverage. This means that your assets may be at risk.

4. Excluded Drive – There are methods to address the problem or expense or the fact that a teen is covered under another policy. You may decide to specifically exclude your teen from operating your vehicles. For example, you and your ex-spouse might decide to allow your teen to drive a car at one household and apportion the insurance premium between the two of you. This is a common solution to the high cost of insurance. However, if you are the parent who has the excluded driver provision, you must never let your teen drive one of your vehicles. In the event the excluded teen driver is operating your car and is in an at fault accident, the insurance company will likely deny coverage to both you and your teen.

5. Dual Coverage – A more expensive, but more secure way to address teens driving in two households is to have the teen identified on the application as a driver in both households. Yes, this option can be incredibly expensive. However, it is the most secure way to protect your assets through insurance coverage for a teen behind the wheel.

Divorce presents special problems when it comes to teen drivers. The issue of automobile liability coverage can be complicated. Money is often tight in a divorced household. However, most certain method of protecting your personal assets while a teen is behind the wheel is to have the teen identified and insured on the auto policies for vehicles in both households. To cut costs, a fall back position might require excluding the teen as a driver in one household. While a sensible choice, it may not be practical because you cannot let the teen drive your vehicles. If you allow your excluded teen to drive your car and should he or she then be involved in an at fault accident, the insurance company nay not provide insurance for the teen or for you.