- Parents must add teen drivers to auto insurance to avoid legal issues.
- Utah law mandates insurance for both vehicle and driver says Utah's Insurance Commissioner Jon Pike.
- Failure to disclose a teen driver may result in denied claims and legal action.
SALT LAKE CITY — The day your teen becomes old enough to drive is both exciting and terrifying for you and your wallet. Bankrate estimates the average 16-year-old driver in Utah adds $5,327 to their parents' insurance premiums that first year.
Some parents curb that cost by not adding their kids to their policy, believing the State of Utah only requires the car to be insured, not the driver.
That's not quite right, according to Utah's Insurance Commissioner Jon Pike.
"It's really a combination of both," Pike said.
He said once your kid passes the driver's test and gets a license, you must tell your insurance company.
What the law says
"Well, the law says that auto owners and drivers are required to have insurance," Pike said. "They're required to have security."
That law is spelled out in Utah's Financial Responsibility of Motor Vehicle Owners and Operators Act. In it, it reads:
"Every resident owner of a motor vehicle shall maintain owner's or operator's security in effect at any time that the motor vehicle is operated on a highway or on a quasi-public road or parking area or registered within the state."
An operator means anyone who is in "actual, physical control" of the car, i.e. your kid. And security means an insurance policy.
Your insurance probably requires it
The law aside, Pike said the odds are super strong that your insurance requires you to add your teen driver.
"If you want to transfer some of that risk to your insurance company, then you've got to pay them to take some of that risk," he said.
If you don't, your insurance company might not cover an accident caused by your teen driver. Then, you're on the hook for repairs, medical bills, legal fees, on and on. Plus, Pike said your insurance would be required to report you for misrepresentation.
"If an insurance company suspects there's been fraud or misrepresentation, they're required to report that to the insurance department," he explained. "Our fraud division is then required to investigate the matter."
The potential consequences of that include jail time.
"I think it's a really bad idea to not tell your insurance company you've got a teenage driver," Pike said.
Permit drivers
For teens with a learner's permit, it's a bit different. Pike said there is no legal insurance requirement.
Still, he said you should let your insurance know. You probably won't have to pay a higher premium for a permit driver. Your insurer knows there's an extra pair of eyeballs in the car with your teen.
