[logi_cal869]

" I didn't know that."

No excuse. No apologies for the obvious.

Anyone who falls in this category should carefully consider whether you want to be an insurance expert...

...or pay a bit more to have an independent agent who actually looks out for your a$$, because "cheapest" has consequences (as does doing it without a local independent agent, regardless the price point).

Free advice.

[dfwgator]

I assume the idea, is that even if not licensed there is a risk that they could take the car without the parents even knowing.

[Blood of Tyrants]

I have had State Farm insurance on my cars and homes for over 30 years. They have never failed to pay a claim nor did they raise my rates because of the claims. I know they probably aren’t the cheapest, but they are good to my family.

[GOPJ]

...or pay a bit more to have an independent agent who actually looks out for your a$$, because "cheapest" has consequences (as does doing it without a local independent agent, regardless the price point).

You're right on this logi... it'll cost more in the short run to pay for another 'potential driver' in the family but in the long run paying for an accident and an injury out of pocket would be a disaster. This guy's lucky the cost is ONLY $5,000. Throw in a small injury and it could have been $30,000

[Alberta's Child]

I’m surprised the law in any state allows this sort of retroactive cancellation in a case like this. It’s not as if the 14 year-old had anything to do with the accident. The erroneous or incomplete information may have had a bearing on the premium, but it had nothing to do with this insurance claim. If anything, it seems the law should require the insurance carrier to pay the claim, but also give the carrier the ability to recover additional premiums from the insured for prior years.

To demonstrate how idiotic this situation is …

Imagine this accident didn’t involve just a $5,000 property damage claim, but a legitimate $500,000 personal injury claim. And imagine being the injured party who doesn’t have $500,000 of insurance coverage, and who learns that the insurance company for the liable party has decided to retroactively cancel the policy to avoid paying the claim.

[Flash Bazbeaux]

“or pay a bit more to have an independent agent”

One of the biggest misconceptions about insurance is that the “agent” is YOUR agent. No, he’s ALWAYS the Company’s agent. He is NEVER YOUR agent.

What you refer to as an “independent agent” is actually an independent BROKER. The BROKER is also an agent of the insurance company, but only for the limited purpose of being able to bind coverage, that is, sign you up for the insurance.

Even then, in that narrow capacity, he is the Company’s agent.

Otherwise your advice is spot on.

[Nifster]

Precisely

Plus it’s not like this is new. Been around forever