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Does a teen driver with a permit need Michigan No Fault insurance?

April 8, 2015 by Steven M. Gursten

I received an interesting question about whether teens driving on permits need Michigan No Fault insurance.

Q. My daughter is taking drivers education soon and will be done in mid-May. Once she has completed that Segment 1 class, she will be able to drive with an adult in the car, with a permit. I asked my insurance agent whether I need coverage for my daughter while she’s on her permit. He said we do not need coverage for her until she actually gets her driver’s license. Given she won’t get her actual license until she’s 16, which is over a year away, does this sound accurate? The agent said my daughter would be covered while driving our cars with us in the car, under our insurance. Just checking, because it seems odd she can drive with an adult and would still be covered without our insurance company listing her on the policy.

A. The insurance agent is correct.

We talked to two insurance experts and here’s what they had to say:

Michael S. Hale of Clairmont-Advisors in Northville explained that “teen drivers are usually not charged for on the parents’ insurance and usually do NOT have to even be reported to the insurer until they obtain their FULL permit.”

Wayne E. Blackwell of Blackwell Insurance Services in Grand Rapids agreed, noting it’s not uncommon for carriers to not “require that a driver under permit status be added to a policy in order to be covered.”

Mr. Blackwell added that, if an insured wants to know how a specific auto insurer handles this issue, he or she could try “securing the insurance company’s filed underwriting rules on the matter.”

To sum up: You do not need coverage for your daughter until she has her license. That’s because under the Michigan No Fault law, she is covered with No Fault insurance under your car insurance policy. And insurance companies don’t add drivers onto parents’ policies until they’re licensed.

So in the meantime, you can also enjoy your car insurance rates being where they are — before they tend to spike when your daughter gets her license.

Related information:

Michigan’s teen driving law

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