Teenage son crashes car: What do you mean I don’t have insurance

Insights for insurance brokers

If advising a client to switch insurance providers, it is important to clearly explain any material differences between their original insurance policy and the proposed one. Understanding your client’s insurance needs helps ensure the new policy continues to meet them.

What happened?

In 2024, Kahukura’s teenage son crashed her car into a brand-new small truck. The truck owner’s insurer demanded $52,000 from her son to cover the damage. When Kahukura made a claim with her insurer, it was declined. The insurer explained that her policy did not cover drivers under 25 years old. Kahukura said that when her broker had changed her insurer a few years earlier, the broker had not explained that she would no longer have cover for drivers under 25. Kahukura said she would never have agreed to insurance not covering under 25-year-old drivers, as friends and family in that age group regularly drove her vehicles. Kahukura complained to FSCL.

How was the complaint resolved?

The broker expressed concern that Kahukura had not taken steps to mitigate the loss by negotiating with the truck owner’s insurer. We agreed that Kahukura should contact the truck owner’s insurer to do this, and she successfully negotiated a reduction in the amount owed to $30,000. Kahukura’s broker offered to pay $15,000 of the amount owed to the truck owner’s insurer, as a way of resolving Kahukura’s complaint, without the need for a full investigation by FSCL. Kahukura accepted the broker’s offer, and we closed our file.

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