Your teen's first car - beware of this insurance gap

My 18-year-old son bought a 2005 Honda Accord and was involved in a minor accident two days later. We hadn't notified our car insurance company yet and we were told he had no coverage because it was titled in his name only. Is this right?

Unfortunately, it is correct. There are a couple of issues that make this claim deniable. First, your son is probably not a named insured on your policy. Named insureds on a car insurance policy are simply the individuals whose names appear on the declarations pages. In your case, you and your spouse are probably the only named insureds.

Second, when your son titled the car in his name, he could only have coverage if he was a named insured on a personal auto policy. Had the car been co-titled with you, then coverage would have been provided by your car insurance policy as a "newly aquired" vehicle and insured at the highest limits you currently carry on your other vehicles.

In this case, your son made the mistake of driving the car off the lot without first contacting an insurance agent or company and obtaining a policy. Therefore, your son can consider himself lucky that the accident was minor and there wasn't major physical damage or even worse, an injured third party.

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