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UPDATED: Mar 13, 2020
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Whenever you purchase an auto insurance policy, your car insurance company will ask who has access to your vehicles or will be regularly driving them. This question helps to determine the insurance rates charged for a given vehicle. If a vehicle is routinely driven by someone not listed on the policy, this may cause problems with your car insurance coverage, and could even lead to a claim being denied depending on the details of your policy. This is why it’s important to list all regular drivers on your car insurance policy.
Permissive Use Drivers
In most situations, car insurance primarily protects the vehicle regardless of who is driving that auto. This means that most insurance companies will pay for damage a vehicle incurs in an accident even if the driver is not listed on the auto insurance. Not all companies do this, however, and you should always check your policy to see whether unlisted drivers are covered before allowing someone else to have access to your vehicle.
If your cousin drives your vehicle frequently or has unlimited access to your car, you should consider adding him to your policy as an insured driver. Not only does this guarantee that any accidents he causes will be covered, it also extends medical coverage to him in the event that he is injured in an auto accident.
What a Permissive Driver can do on your policy
Adding your cousin to your auto insurance also enables him to file a claim against the policy and handle claim-related affairs with the insurance. If you are uncomfortable with allowing a family member to file a claim and schedule an inspection assignment without you needing to be involved, you should not add that person to your policy and should consider limiting his access to your vehicle.
In some situations, having at least one other person listed on your policy can be extremely helpful. If you are ever out of town while your vehicle is damaged at home, for example, the person who is house-sitting can have the vehicle repaired before you get back. This can be very convenient and saves you a lot of time over having to wait until you can file the claim yourself.
Owned Vehicles and Car Insurance
In some situations, individuals will try to save money on car insurance by insuring many people’s vehicles under a single family member’s policy. While in some situations this may be a legitimate option, care should be taken that the vehicle can be legally insured by that individual.
A person may only insure a vehicle he or she has legal ownership of; this means that if your name is not on the title, you should not purchase insurance for a vehicle. If it’s determined that you are insuring multiple family members under your policy and do not own the titles to all of those cars, your policy may be reviewed and possibly canceled depending on the situation.
Household Members and Excluded Drivers
A person does not need to be a member of your family or even live with you in order to be added to your car insurance. If you have friends or family that frequently need to drive your vehicle for some reason, they can be added to the policy. Their driving habits may influence your insurance premiums, however. This is also true of family members who live in your home but are not necessarily listed on the policy.
This means that if you allow your vehicle to be accessed by someone with a poor driving history or history of DUI convictions, your rates will likely be increased. If you do live with someone whose driving habits can influence your policy, you might wish to exclude them from your policy. This will prevent your rates from increasing due to your relative’s unsafe driving.
If you do choose to exclude your cousin or any other individual from your policy, be sure that you never allow that person to drive your vehicle. A policy exclusion means that person is not allowed access to your insured auto, and any accident that person causes in your vehicle will be denied by your insurance. You may even have your policy canceled if the insurance company learns that you have allowed excluded drivers unlimited access to your vehicle.
Whether or not you choose to add your cousin or other family members to your policy, it’s always a good idea to take the time to understand how your policy will apply to other drivers. By knowing in advance who will be covered in the event of an accident, you can make a wise decision regarding who can drive your vehicle.