Will my Insurance Cover if an Unlicensed Driver Crashes my Car?

In case an individual without a driver’s license, such as a spouse or a driving-age child, resides in your household, you would have been obligated to inform your car insurance provider about their presence. Subsequently, certain insurers might incorporate this person into their premium calculations, despite their lack of driving privileges. If your insurer was aware of an unlicensed household member, increased your premium due to their inclusion, and you have the appropriate coverage for damages, they might be liable to cover the resulting costs. It’s important, however, to have the necessary coverage in place before this becomes a viable consideration.

Even if they were aware of the unlicensed individual in your household and chose not to adjust the rate or impose an additional charge, they may still pay the damages and injuries caused by the unlicensed driver in an accident involving the insured auto, especially if the policy does not specifically prohibit coverage for such an individual. Nonetheless, they could opt to reassess the individual’s rate during the next renewal or potentially decline to offer renewal terms altogether based on the occurrence.

On the other hand, failing to disclose presence of an unlicensed person of driving age in your household could lead the insurance company to reject the claim, citing your omission of significant information. In many states, auto insurers not only have the right to reject claims based on substantial misrepresentation but can also terminate the policy as a result.

Should an individual without a valid driver’s license operate the vehicle despite being explicitly excluded in the policy, the automobile insurance company will decline coverage for any resulting claims. When a person’s name is specifically excluded in the policy, it signifies that they should not have been driving the vehicle, consequently resulting in a lack of coverage.

If another individual, who does not reside with you, were to drive your car without a valid driver’s license, the potential consequences extend beyond just denied insurance claims. You could find yourself in legal trouble as well. Vehicle owners bear responsibility for the actions of those operating their vehicles. Permitting an unlicensed individual to drive your car could lead to your involvement in a criminal situation. Allowing someone without proper qualifications to control a motor vehicle is seen as assisting in the commission of a crime. This act of knowingly facilitating a violation of the law could result in charges being brought against you in a court of law.

For example, car owners can be charged for letting someone with no, suspended or revoked driver license drive their vehicles in New York. The penalty can be a fine between $500 and $5,000 and up to six months jail sentence. Other states have similar laws. In Pennsylvania, the facilitating vehicle owner would get the same penalty as the person driving with a suspended or revoked license and it can mean suspension of driver’s license up to 5 years.

However, if they told you lies to get their way or you had no reason to suspect, you may escape the charges. Then, it would be up to the auto insurer to consider paying for damages or not. When something is clearly illegal in your state, you are required to make sure you don’t commit a crime. In this case, if it is a crime to let an unlicensed driver operate your vehicle in your state, your vehicle insurer can turn around and say that you should have checked.

The key point here is that auto insurance companies wouldn’t insure an unlicensed driver to drive a car. If they are ever included in a policy because they are the owner of the vehicle, they would clearly be excluded from driving. So, it is understandable that they would expect the same sensitivity from their policyholders too.

Finally, if someone stole your automobile and crashed it, it is irrelevant that such person was unlicensed because your vehicle was taken without your consent and your insurer has to pay for theft or damages relating to a theft as long as you have coverage for it. In this case, you would need Comprehensive coverage to be able to claim for a stolen auto.

In the eyes of the law, automobile owners are responsible for their actions and they can be sued for letting someone unlicensed to drive their cars. And if they were negligent to a point that they knowingly hand over their car keys to an unlicensed driver, their insurer may refuse to pay any related claim.

It is important to note that the outcome of a claim depends on the circumstances, insurer and state rules. Therefore, it is best to check with your agent, insurer or even lawyer to get the right advice for your circumstances.