Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Oct 13, 2020

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Here's what you need to know...

  • A learner’s permit is a provisional license that’s issued to teens and some inexperienced adults when they need behind-the-wheel experience
  • Under a standard Personal Auto Policy, listed drivers and some other household members are covered even when they aren’t named on the policy
  • It’s important to check for the rules in your state or with your carrier to verify that your teen doesn’t need to be listed until they pass their licensing exam
  • If you fail to add a teen and they have an active driver license, there’s a chance that damage and liability claims could be denied for misrepresenting risk in your household

For most parents, the idea of your child getting their permit is frightening. That little one that you once pushed on the swing will soon be operating a 2-ton motor vehicle on the open road.

Even though it’s a scary thought, issuing learners permits is a must so that young teens are able to operate a motor vehicle before they’re tested on their road skills.

You as a parent simply need to focus on teaching your child how to be defensive and responsible when they drive.

Teaching your child to be a skilled driver is important but mishaps do happen.

To prepare for these road-based mishaps, you need to be sure that you have the right amount of financial protection in the form of auto insurance.

Surprisingly enough, your auto insurance rates might not automatically go up when your teen has a provisional license. Whether or not this happens depends on where you live and the company that you carry coverage through.

This is why it’s so important to learn how your auto insurance works before you give your teen driver their first lesson.

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Inform Your Insurer When There Are Household Members Over 13


Every company requires their policyholders to disclose household members to the carrier, even when the household members don’t have access to the insured vehicles.

This policyholder obligation ensures that the company is aware of all of the potential risks that are present in the home so that specialists can underwrite thoroughly.

You might think that you don’t need to list residents who aren’t licensed, but even unlicensed family members should be disclosed to avoid any type of confused.

In most auto insurance policy contracts, the company will specifically ask you the names of all residents in the home as long as they are 13 or older.

This helps underwriters follow up with policyholders at each renewal to ensure that the policyholder doesn’t forget to add the teen once they do have a license since your premiums are dependent on characteristics of your household members.

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What is the difference between a rated driver and a listed household member?

As you’re filling out your auto insurance application, you should know how important honesty is.

You may think you’re helping out your pocketbook by failing to name some of the more high-risk household members, but sometimes this can cause more harm than good.

Being honest doesn’t always mean that your rates are going to go off but it’ll always payoff when you need to file a claim.

In the world of insurance, some household members are classified as rated drivers and others are called deferred household members.

A deferred driver is one who has been disclosed by the named insured but who isn’t affecting the premiums on the policy.

Reasons Someone Qualifies as a Deferred Operator


There are a few reasons why the rates for a specific household member might be deferred rather than listed and rated.

Here are some of those reasons include:

  • Someone in your home has a license but they also have their own auto insurance
  • A teen in your home has a learner’s permit and the company doesn’t charge for permitted drivers
  • You sign a driver exclusion form stating a resident in your home won’t have coverage if they drive your vehicle

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Why does insurance carriers offer coverage to unlicensed teens at no charge?

It might be perplexing to think that your teen could hit the open road and your insurer would be willing to offer you coverage for them at no charge.

What you might not know is that, in the eyes of the insurer, holding a provisional license is not quite as risky as holding a driver license.

In some states, auto insurance companies can’t charge a teen driver until they’re licensed.

In other states, it’s the carrier’s job to decide what their policy is on insuring teens with learner’s permits.

Here are some reasons why a carrier might not charge for a teenage driver:

  • Permit holders must be under the supervision of a licensed adult
  • Teen drivers can only drive during reasonable hours
  • Teens only hold their permits for a short period of time
  • Underwriting an unlicensed risk can be difficult and will cost the insurer too much money
  • Giving complimentary coverage can increase customer retention

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Are there company-declared restrictions for teens who aren’t rated?

If you are lucky enough to find a company that won’t charge you for your teen while they’re learning, you should still look into conditions that might affect your automatic coverage provision.

If any of these conditions aren’t met, coverage may be null and void:

  • A licensed driver over 25 isn’t in the car at the time of the loss
  • The teen isn’t driving during the restricted hours
  • The teen now has a driver license

What happens when you add your teen to your policy?

If you don’t add your now licensed teen to your insurance, any future losses that your teen has in your car won’t be covered unless they are rated.

Be sure to take advantage of driver training discounts and good student discounts to keep the high teen driver rates down.

Some auto insurance carriers have very affordable rates for higher risk operators and others try to keep these households away by charging a higher price point.

Some auto insurance carriers have very affordable rates for higher risk operators and others try to keep these households away by charging a higher price point.

The most effective ways to go about finding affordable auto insurance on a teen driver is to shop around.

By shopping around, you can identify which reputable companies have competitive rates and which don’t.

The fastest way to get auto insurance quotes is to use an online rate comparison tool. Use our free comparison tool to find affordable insurance. Enter your zip code to get started now!