Putting Kids on Insurance or Not

[Air Jer]

Most policies specifically say that you must disclose all household residents 15 years of age and older and anyone who is a regular operator of the car. At least for the 15 companies that I do business with in MD VA and DE that is the case.

Is this policy language or underwriting requirement? There is a difference.

 

[Insurance-Guy]

Most policies specifically say that you must disclose all household residents 15 years of age and older and anyone who is a regular operator of the car. At least for the 15 companies that I do business with in MD VA and DE that is the case.

Is this policy language or underwriting requirement? There is a difference.

It is in the application and on the policy that you have disclosed all operators and non licensed residents most say age 15 or older.

 

[Air Jer]

Insuranceman1: and on the policy that you have disclosed all operators and non licensed residents most say age 15 or older.

Where at in the policy? One step further, if I buy my insurance from you and I have a 14 year old, a 12 year old, & a 10 year and keep my coverage with you for years, what happens when each of these kids becomes a driver? Are you suppose to track this every year and tell the carrier?

The ISO PAP states that the insured and any resident of the insured's household is an insured driver. It does not say anything about their age and in fact is completely silent on their age. Thus, my 10 year old can take mom's Jag for a joy ride and there would be coverage if involved in an accident.

 

[VolAgent]

Insuranceman1: and on the policy that you have disclosed all operators and non licensed residents most say age 15 or older.

Where at in the policy? One step further, if I buy my insurance from you and I have a 14 year old, a 12 year old, & a 10 year and keep my coverage with you for years, what happens when each of these kids becomes a driver? Are you suppose to track this every year and tell the carrier?

The ISO PAP states that the insured and any resident of the insured's household is an insured driver. It does not say anything about their age and in fact is completely silent on their age. Thus, my 10 year old can take mom's Jag for a joy ride and there would be coverage if involved in an accident.

If that is the case, then why do insurers charge more when you add the 16 year old to the policy? If they were covering them anyway, it should be a non-event.

Your advice sounds extremely dangerous. It is going to blow up and hurt you, your clients or both. The best outcome is your clients get covered and you get blackballed from the industry.

 

[Air Jer]

VolAgent: Read my earlier post. I am not condoning this nor would I do it. As I stated earlier, if an agent makes a habit of hiding important information from his/her carriers, they are going to lose them as the carriers will indeed pull their contract and rightfully so.
My point is this. Everyone is saying it's in the policy. No it isn't! The ISO PAP is completely silent when it comes to the age of drivers. However, insurance companies want to know this and a smart insurance agent is going to tell them this. Yes it will increase the premium as you say but let's not confuse underwriting guidelines & rating methodologies with the policy language as we are talking separate issues. If a 10 year old has an accident, it's covered. If a 16 year old who had not been reported to the company has an accident it's covered. However, one could expect the agent to have a tenuous relationship with the insurance company if this happens more than once. Therefore if one does slips by inadvertently, an agent does not have to sweat bullets with his/her E & O carrier.

 

[Insurance-Guy]

You can do what you want. Every application I have ever seen says that you have disclosed all operators. I know what you are saying and yes your 10 yr old would be covered but that is not the point. If you are deliberately try to defraud the company by omitting a 16 year old then yes they can and should deny a claim. If you fail to disclose your young operator years after you took out the policy they will give you an offer to exclude, non renew you, or add the operator and surcharge the crap out of you. SEEN it loads of times...the problem with them denying the claim is that they have to prove fraud which if you tell them that there are no kids in the house on the application and it is signed then that is fraud. Now the way I understand it MD is a hard state to deny a claim based on this however VA is easy therefore companies in MD spend loads of money checking to ensure all licensed operators are added to the policy. I get calls everyday from underwriters asking who is Johnnie JR? We have to add him on the policy the data base shows he lives in the household and is a driver. The only option at that point for the parents is to EXCLUDE him. There is no choice in the matter they will and can add the driver to the policy.

 

[Air Jer]

If you fail to disclose your young operator years after you took out the policy they will give you an offer to exclude, non renew you, or add the operator and surcharge the crap out of you.

What if it is someone you wrote 10 years ago that had young children and they have stayed insured with you all of this time. RU saying that you diary every situation like this just in case 10 years from now those kids come of driving age? If you 4,000 personal auto policies is this possible?

PLEASE EVERYONE - I am not suggesting that the insurance company be held in the dark or defrauded. I value the relationship I have with my companies way too much for these type of shenanigans. What I am saying is when folks state it's in the policy so it's not covered, I am saying no it isn't. When it comes to a claim, it is the policy that dictates coverage and not what a company prefers. If you don't believe me, that's OK but READ THE POLICY on who is an insured driver and there is no mention of age.

 

[joshb]

The auto carriers reunderwrite every few years and run additional driver reports. I'm almost positive that the policy says if there is a significant change to the risk you have a responsibility to notify the company. A driver coming of age is a significant change to the risk. By the way people don't forget to add their children very often. Coming of age and getting your license is a HUGE deal for most families. I have had claims paid when a customer's daughter turned 17. Legal age in Florida to drive is 16 so obviously it wasn't caught for a year. It was only a minor claim though. I have also seen claims denied for this same thing. Its a risk not worth taking. There are carriers that try to get out of EVERY claim and then there are carriers that realize its not worth it. Which carrier are you with?

 

[Air Jer]

I'm almost positive that the policy says if there is a significant change to the risk you have a responsibility to notify the company.

Where in the policy?

 

[VolAgent]

I'm almost positive that the policy says if there is a significant change to the risk you have a responsibility to notify the company.

Where in the policy?

You're very adamant about this. Can you post a specimen policy from your state? I'm not a P&C agent, but I can't see how the company left that big a hole in the policy. I'm not saying I doubt you, I just have a hard time believing companies leave such a big risk hole open in the policy. It would be like writing a health insurance policy that provides coverage for any member of the family, but not requiring notification of new family members.