If you live in a household with multiple cars and people old enough to drive, it can get confusing to figure out who should be covered under your auto insurance. Determining who should be listed as a household member on your car insurance policy will help you avoid getting a claim denied or putting your legal liability in jeopardy.
Car insurance not only pays for repairs when your car is damaged in an accident, but liability insurance as part of an auto policy pays for injuries and property damage caused by drivers of your vehicle.
An auto insurance policy may by default cover anyone living at home who has access to your cars, such as teenagers and an elderly parent. But it likely won’t and will require the policyholder to add them to the policy, which will likely lead to higher premiums.
Here are six types of relationships with people who should be covered under your auto insurance policy. They could go get their own coverage, though it would be likely be more expensive than being added to a family policy. It is important to remember car insurance follows the car, not the driver, so if someone is using your car often, you’ll want to think about whether or not they are listed on your policy.
Drivers Who Should Be Listed On Your Auto Insurance Policy
Teen driver living at home
Insurance for a newly licensed teenage driver can be some of the most expensive insurance available, and for good reason — teens get into car crashes more often than any other age group. Teen drivers age 16 to 19 are nearly three times as likely than drivers 20 and older to be in a fatal crash, according to the Centers for Disease Control and Prevention.
Collision coverage is optional if you don’t owe the bank money on the car, but it’s worth having if you have a teen driver so that any damage they do to your car is covered. If not, you’ll have to come up with the money yourself for repairs.
If your child is a minor, you could still be held liable for his accidents. If he gets his own car and buys insurance himself, parents may need to sign the policy because the child still isn’t an adult.
Teen not living with you
If you’re divorced and your teen driver lives with another parent, you may still want the teen on your policy.
Your insurer may require that the teen be listed on your policy if your child visits on a regular basis. Even if your teen lives elsewhere most of the time, your insurer will assume that the teen will drive your car when they visit you.
Car insurance follows the car, not the driver. Coverage from the other parent’s policy won’t extend to your car.
Child moving back home
If you have an adult child who has moved back home, you must tell your insurance company that you have another licensed driver living in your home. This is because — as in many of these relationships we list — anyone with regular access to your home is assumed to have regular access to your vehicles.
You won’t be held liable in most states if an adult moving back home with their own car has an accident. If they’re driving their own car, you shouldn’t have to list them on your policy, unless they borrow your car on occasion. Coverage from their policy won’t extend to your car.
As we reported before, children moving back home should be listed on the parents’ auto policy, even if the child has their own car and their own insurance policy.
Parents can exclude their adult children from their coverage, but an accident by the child in the family car won’t be covered. The excluded driver will probably be required to have their own insurance elsewhere.
Parent who lives with you
Just like an adult child moving back home, a parent who lives with you and has their own car should have their own insurance. You shouldn’t have to list your parent on your policy, though you may have to show proof of his insurance policy to your insurer.
If the parent drives your car, he’ll need to be added to your policy. If they aren’t added and cause a crash, your insurance claim could be denied — just as with an adult child living at home.
If a caregiver or friend regularly drives you around in your vehicle, you’ll need to add them to your policy as a listed driver.
You may want to add them as the primary driver. This can be necessary if you no longer have a valid license, or have given up your license. You’ll still need to insure the car as the car owner if you aren’t listed as the primary driver on your policy.
You lend your car
If you let relatives, neighbors, friends or other people who don’t live with you from time to time, you don’t have to list them on your auto insurance policy.
You’ll be covered if they get into an accident, but the claim will go against your policy and your car insurance rates could go up later.
Before lending your car to anyone, ask your insurance agent if your policy covers anyone you give permission to. Also make sure the driver has a valid license. Your friend’s insurance won’t cover your car if they drive it, though their policy may be secondary. Remember, insurance follows the car, not the driver.
For people who don’t have their own car but use yours often, they can buy non-owner car insurance. It’s meant for such situations and requires them to make insurance premium payments instead of you. While adding someone who lives at your home as a driver on your policy will often increase your insurance costs, this is one instance where someone else who drives your car can pay their own way.