I thought I could go out and buy a vehicle for cash but was told by the agent that I’m not allowed to add another vehicle unless their is another license driver over age 25 in the household.

  1. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    Each car in the household is rated on a specific driver. The impact of an inexperienced driver is placed on one car in the household. If the inexperienced driver is the third driver in a two car household the new driver will be assigned as occasional to one of the vehicles. The impact is more significant if the vehicle is new and insured for liability, comprehensive and collision. Some people buy an additional older car so that the inexperienced driver will be assigned to that car. I do not understand the logic in adding two older cars.
    Answered on February 23, 2015
  2. 385 POINTS
    Soarella - Mary Gruenberg
    President, Soarella, Inc.,
    When you have a loan on a vehicle, your loan contract will require you to carry coverage on the vehicle itself which is known as physical damage coverage. Physical damage comes in the form of comprehensive and collision. In general, collision is anything you collide or have an upset with and comprehensive is everything else.

    Basically, the lienholder wants their interest protected which is the car. When a lienholder is listed, the insurance company is obligated to let them know if this coverage is dropped. If the coverage is removed, the lienholder, contractually, has a right to obtain coverage on its own and to add the cost to the amount of your loan.

    Adding teen drivers to a household can be expensive since they are inexperienced behind the wheel and are statistically more likely to have an accident. Check with your agent to see if any additional discounts are available with a youthful driver. For example, many companies offer a good student discount if the teen driver averages a B or better in school.
    Answered on February 25, 2015
  3. 14231 POINTS
    Tom Sheehan
    Agency Owner, The Thomas G Sheehan Agency, 27 Glen Road Sandy Hook, CT 06482
    You are absolutely right, if you have a car loan or are leasing a vehicle, both contracts require that you carry Physical Damage coverage provided by both Collision and Comprehensive. If you remove those lines of coverage you perhaps run the risk of voiding your finance agreement.
    Now, purchasing an older car and choosing not to carry anything but liability on oit is yours, not your agent's choice to make. Some companies assign a specific driver to a specific vehicle, others use a "driver averageing " system whereby no one is asigned to a particular vehicle.
    Answered on February 26, 2015
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