Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insuranc...

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Melanie Musson is the fourth generation in her family to work in the insurance industry. She grew up with insurance talk as part of her everyday conversation and has studied to gain an in-depth knowledge of state-specific insurance laws and dynamics as well as a broad understanding of how insurance fits into every person’s life, from budgets to coverage levels. Through her years working in th...

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Reviewed by Melanie Musson
Published Insurance Expert Melanie Musson

UPDATED: Mar 31, 2022

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Car insurance can be expensive, and many people want to avoid purchasing their own auto insurance policy if it isn’t absolutely necessary. If you live with someone who already has car insurance, do you need to buy a separate policy? Do you have to be listed on their policy in order to be covered by their insurance? What happens if you drive a car someone else in your household owns? It’s important to understand how these situations are handled so that you can make a wise decision about whether or not to put someone else on your auto insurance policy.

Resident Relatives and Car Insurance

In most cases, an insurance policy will extend to any resident relatives in the home. A resident relative is defined as a person who is either the spouse or blood relation of the policyholder and lives in the same home. Generally speaking, anyone who lives in the home and is related to the insured will be covered as part of the insurance unless they are excluded from the policy.

This is especially important for injury coverage such as personal injury protection (PIP) or medical payments (medpay) coverage. PIP and medpay cover medical expenses caused by car-related injuries, including car accidents and individuals hit as pedestrians. PIP coverage pays for injuries regardless of who is driving the vehicle and who owns the car involved in the accident; any time you are injured by a vehicle, you can file a claim on your first-party injury coverage. This coverage applies to all members of a household who are not excluded from an auto policy.

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Car Insurance Covers the Vehicle

Whenever you buy car insurance, you are paying to have a specific vehicle insured against damage. Because the vehicle is the subject of insurance, the coverage will follow the vehicle itself regardless of who drives it in most situations. This is why it’s important to have an active insurance policy for every vehicle that you own; even though you have insurance on another car, that coverage will not transfer to any other car you own.

You can only insure a vehicle that you own. If you are not the registered owner of a vehicle, you cannot pay for insurance on that car. The reason for this is that it provides a conflict of interests to the insurance company: When a car is damaged, they must pay the owner of the vehicle for the damage. If the owner is not listed on the policy, the insurance company cannot honor that payment.

If you don’t have a car, you don’t need to have car insurance. Some policies do exist for drivers without vehicles, however. These predominately pay for injuries sustained while driving another person’s car, while riding as a passenger in another vehicle or while hit as a pedestrian. Before buying this type of coverage, check to make sure you’re not already covered for this; if you are a resident relative of someone who has PIP/medpay on their insurance, you should already be covered.

Excluded Drivers

In some situations, a driver can be excluded from the policy. This means that the policyholder has agreed that a specific driver will never be allowed to drive a vehicle on the policy. Drivers can be excluded due to their age or driving history; high-risk drivers can cause rates to rise significantly on a policy, so a policyholder can save money by excluding these types of people from the policy.

Some auto insurance companies exclude all drivers who are not listed by name on a policy. If this is the case, you will need to check with your relative to see if you have been added as a driver or not. If you are not listed as a driver or are listed as an excluded driver, you should not drive any vehicle that they insure. If you were to drive one of these vehicles and have an accident, the claim would be denied by the insurance company.

Not All Car Insurance Companies Operate the Same Way

While the majority of insurance companies do cover resident relatives through insurance, not all companies do. Before allowing someone to drive your vehicle, you should always contact your insurance company to determine how your coverage will transfer to that unlisted driver.