This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

When Your Kid Takes A Joyride

Car keys on the kitchen counter aren't an invitation for your child to take the car without asking and go joyriding. But that simple act could be enough to leave you liable if your kid gets into an accident and injures someone or damages another car.

At best, you will pay much more for insurance in the future. At worst, you might be personally liable for the damage your child causes.

Determining who pays when your kid joyrides -- especially if he or she is unlicensed and not yet on your car insurance policy -- can be tricky. The most likely scenario, insurance experts agree, is that you will have to pay out of pocket for the damage the child causes.

Here are some insurance issues to consider if your unlicensed kid joyrides and gets into an accident:

Is the teenager even covered by your policy?

Some policies will cover all household members, whether they're licensed or not, says Penny Gusner, consumer analyst for CarInsurance.com. Others will cover only licensed drivers.

Any insurance company will require that you list all licensed drivers in a household; many will want to know the names of household members over a certain age, even if they are unlicensed. (See “ Young drivers: What you need to know.”)

Not complying is a material misrepresentation and a form of insurance fraud, Gusner says. A joyriding accident could lead to a cancellation or nonrenewal. Every company has a policy, and it's best to ask beforehand.

Can you make a claim for a joyriding-related accident?

Unless your insurer is very forgiving, you're unlikely to be covered for what the insurer calls “unauthorized use.”

"Normally a car driven without your approval is not covered," says Bob Hunter, director of insurance at the Consumer Federation of America.

It's up to your insurer's guidelines. Farmers Insurance, for example, will cover the joyriding accident. But afterward it would demand that the child driver be added or excluded from the policy, says Cristofer Pereyra, a Farmers' agent in Phoenix. Rates would be adjusted accordingly.

Will homeowners step in? Nope, says Gusner, “not unless your teen hits your house.”

Do you need to press charges?

“Unauthorized use” isn't covered by most car insurance policies, but theft is -- as long as you have comprehensive coverage.

That leads some car owners to believe they must press charges against their own family members after a joyride-related accident. The problem, Gusner says, is that most insurers don't consider joyriding to be theft when a family member was involved.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 16,102.38 -272.38 -1.66%
S&P 500 1,921.22 -29.91 -1.53%
NASDAQ 4,683.9190 -49.5780 -1.05%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs