The US State That Can Penalize Parents If Children Aren't On Their Car Insurance Plan

At least two major insurance companies in the state of Michigan — Geico and AAA — openly deny insurance claims if every household member isn't listed on a customer's policy. Unlike many other states, where policyholders are required to list every household member of driving age, Michigan demands that providers be notified of even young children living with the policy holder. Numerous families in Michigan have found this information out the hard way, having claims in the thousands or tens of thousands denied for misrepresenting their situation. Families are also getting their policies cancelled after the companies are alerted of the infraction.

Geico, which Consumer Reports named one of the best car insurance companies for people making less than $50,000 in September 2025, has been at the center of this controversy. When asked why claims are being denied, a company spokesperson told Click on Detroit, "Due to Michigan Personal Injury Protection requirements, all household residents must be listed on the auto policy, regardless of age." Meanwhile, the Michigan Department of Insurance and Financial Services confirmed that making this a requirement on a policy is legal, so Michigan drivers should carefully look at their own policies. In short, these Michigan families are experiencing another unexpected way that auto insurance choices can come with big costs.

It's understandable why people might get confused: Many states and insurance providers don't require unlicensed teens or household members under the age of 14 to be listed on policies. And while these conditions on Michigan policies may seem unique, many other states also require no-fault insurance policies to feature Personal Injury Protection, so it stands to reason that providers in other areas may also have similar regulations regarding household reporting. This possibility makes it especially important for people to read the fine print before signing a policy form.

If your policy gets cancelled, be sure to review the policy terms along with any other communications from the insurance company. If you speak with a representative for your provider or an insurance agent, be sure to document any and all correspondence you have with the company. From there, you may want to contact an attorney if you don't get the results you're looking for or need help confirming your state's specific regulations.

Additionally, while these issues largely pertain to auto policies, you may find similarly problematic caveats in the policies you have for other types of insurance as well. For example, a simple phone call could lead to your homeowners insurance policy cancellation if you aren't careful. So, similar precautions may be helpful if you need to dispute an insurer's decision or find that another one of your policies gets retroactively cancelled.