Are all drivers in the same household covered under my car insurance?
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UPDATED: Mar 13, 2020
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If you have a large family, you may be concerned about whether your car insurance will cover all members of your household. If you share a car with your spouse, should both of you be listed on the policy? If your children occasionally borrow the car, should you add them as drivers? What if someone else is driving your car and it sustains damage? In order to make the best decision about your car insurance needs, you should take the time to understand how your policy works; that way, you can be sure to make the best choice about your policy.
The majority of car insurance follows the vehicle, not the driver. This means that if an insured vehicle gets into an accident, the damage will be covered regardless of who is driving it as long as that person had permission to drive the car. For insurance purposes, permissive use is generally implied; if you know a person and they have access to your car, they will be considered to have permission to drive that car. Unless a person is specifically excluded from the policy or the car is reported stolen, most policies will cover damage to a car no matter who is driving it.
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There are some exceptions, however. In order to keep costs down, some car insurance companies will only cover damage to a vehicle if it’s driven by a policyholder. In other cases, anyone not listed on the policy is considered to be excluded. The best way to know how your policy handles unlisted drivers is to ask your agent or call the customer service number for your insurance company.
The Benefits of Being Listed on a Policy
Just because a car’s damage is covered regardless of the driver does not mean that you should not include your family members on your auto policy. For the most part, your insurance company will only be able to release information to a person who is listed on the policy. Individuals not listed on the policy can file a claim, but the named insured needs to call the company in order to discuss coverage, establish inspection appointments, receive claims checks or make any changes to the policy.
While this may not seem important, bear in mind that if something were to happen to you, no one else in your household could access your account. For example, if you are in a car accident and are badly injured, your spouse may want to file the claim while you’re in the hospital. If he’s not listed on the policy, the claim cannot be settled until you speak to the insurance company yourself.
It’s always a good idea to have at least one other person listed on your policy to handle your affairs in the event of an emergency. It’s also smart to include any children who drive frequently, especially if they’re away at college, so that they can handle their own insurance claims.
In some cases, you may want to exclude a driver from your insurance. If you live in the same house as someone who is a high-risk driver, they can cause your rates to increase even if they don’t drive any of your cars. For example, if your son is under 25 and lives in your house, your rates will be higher than if he doesn’t live with you. Alternatively, if someone in your household has a suspended license due to a DUI charge, your rates may still be affected regardless of him not being able to drive.
In situations such as these, you may choose to exclude these drivers from your policy. Many people choose to have their adult children purchase their own policies, and then exclude them from the parent’s policy. This can be a smart financial decision, but also has serious consequences: Car accidents caused by excluded drivers will usually be denied by the insurance company.
If you choose to exclude your child from your policy, be sure that you take that exclusion seriously and never let that person drive your car. Even if your child is never in a car accident, if your insurance company learns that you are allowing excluded drivers to routinely use the vehicles on your policy, they may terminate your policy.