Written by Q: If a teen is dropped from a parents car insurance policy due to an accident, can this teen drive under this policy again.  Is there any kind of reinstatement, or is it impossible to reinsure through the same policy?
AIS Answer: Well, getting “dropped” from a policy is not exactly how it goes, in specific terms. There are a few options an insurance company will use to minimize their risk (i.e. higher premium/excluding certain drivers), but the most common method is declining coverage after the policy renewal period unless demands are met to bring the current situation to a less risky endeavor.
When an insurance company has a driver on a multi-driver policy (regardless of age) that no longer meets their requirements for the current coverage, the insurance company will give the policy owner 1 of 3 options. Continue insuring all names under the current policy at a revised (and often wildly higher) rate, drop the named driver from your policy, or you can choose to cancel the policy altogether. Either way, by the time the policy renewal date starts the driver will no longer be covered under the revised policy.
If you decide to keep your policy then the insurance company will insist you either pay this new rate to minimize their newly factored “risk” in covering said driver, or, you’ll have to file a¬¨‚Ć “Named Driver Exclusion” on the policy barring this driver from operating any vehicles insured under the policy.
A Named Driver Exclusion has been covered a few times on this site, just do a search for it and read the full articles, but the basic outline is this. You agree in writing that a certain person or persons are no longer allowed to operate any insured vehicle on the policy.
Even more specifically, to address the question. A “dropped” driver was simply excluded from the auto insurance policy one way or another but it all comes down to the simple fact that this person cannot operate any vehicle insured under the current policy without having separate insurance of their own. Often you can keep the driver on the policy but beware of the very real possibility of a sky-high rate increase.
A licensed insurance agent can tell you exactly how this will affect a teens ability to obtain the proper insurance, and of course if they’re covered under the current policy. Any questions you have about the absolute specifics of an insurance policy should only be answered by a licensed insurance agent.
Yeahhh…that really sucks when your insurance company drops you. A few speeding tickets, or negligent driving and BAM…goodbye they say. I was there and it’s expensive to try and find good and inexpensive car insurance when you’re a teenager.