Fist of all, on what basis did your insurance company deny coverage. Was your son excluded from the policy? Did you tell them that he had no permission to drive? Secondly, have they filed a law suit against you or your son yet? your license will get suspended if they get a judgment and report it to DMV. On the other hand DMV will nto revoke your license unless you did not have insurance at the time. You are saying that you did, so I do not see a problem.
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I am not licensed to practice law in California so the following should not be taken as legal advice, but simply as information based on general principles which is intended to educate. If you need legal advice, please consult a lawyer who holds California licensure.
You DEFINITELY NEED LEGAL ADVICE. Since you purchased insurance, and this is a claim against you based on the use of your vehicle, you should contact your insurer and tell them the whole story. I cannot say one way or the other whether they will hire a lawyer to defend you in the claim, but it is possible that they will. However it is virtually certain that they will not hire a lawyer to defend you if you do not tell them about the claim.
Once again, get legal advice from a lawyer who holds California licensure. Contact your insurer and tell them what happened.
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