Are car insurers allowed to require information about the people who live with you for your auto insurance policy? The very idea of an auto insurance company demanding such information from you may seem offensive. After all, what business is it of theirs who lives in your house—particularly if you are the only person driving the insured car?
Insurance companies must consider a variety of factors before determining the final price of your auto insurance policy. Remember that the insurance provider is not only insuring the price of the car, but also insuring the welfare and wellbeing of each passenger involved in a collision.
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Liability Insurance and Multiple Drivers
The driver may choose different coverage types depending on what he or she sees as a high-risk scenario. For example, most states require that all motorists carry some form of liability insurance coverage.
Liability covers drivers for any legal and medical expenses their reckless behavior incurs; this means the cost of damages that affect other people or property. There are also additional insurance coverages that insure other people driving in your own vehicle, as well as passengers in the other car.
The type of insurance involved and the amount insured may directly impact the price of your premiums.
Generally speaking, liability insurance traditionally insures claims made against the driver, as well as any other operators of the car. Details of these policies commonly differ among various insurance companies, and individual policies.
For instance, some policies might strictly cover one driver only. Other policies may state that coverage only applies if the other driver involved in the altercation does not live at the same address as the primary driver. Insurance underwriters can also specifically exclude certain individuals from coverage.
People Living in the Same House
The insurance company will insist that anyone who lives in the same house, and who frequently or irregularly operates the same vehicle as an insured driver, must be accounted for on the policy and must take accountability as a second driver.
Therefore, if a child becomes of legal age, then the insurance company will usually insist that he or she is officially added to the policy, unless they have their own separate policy.
Note that this provision usually does not extend to drivers that operate other vehicles.
If you drive a car or truck that is owned and insured by someone else, you are not covered under your liability policy. Generally speaking, auto insurance follows the vehicle.
You are covered under that other person’s policy, unless it is stated otherwise. An exception is a non-owners policy which universally cover a policyholder regardless of what vehicle he or she drives.
Knowing these basics about liability insurance, you may now understand the reason why auto insurance companies require information about every driver in your household. They want to know who might be driving your car on a regular basis. Because this person is a potential driver of that vehicle, he or she puts the car at additional risk.
In other words, the insurance company just wants to know that potential operators of your vehicle will be far away and usually inactive—unlike a child who just can’t wait to turn 18 and burn some rubber!
Do You Have to Answer These Questions?
Does the insurance company have the right to ask about other drivers in your home? Definitely. The insurance company is trying to decide if they want to invest in your driving safety. Rest assured; they will consider every detail. Some of their questions may seem invasive.
They may want to know all of the other people you know who might require access to your car. They might want to know all about your sons, daughters, relatives, boyfriends and girlfriends.
By the same logic, you don’t have to answer these questions if you feel it is none of the insurance company’s business. The insurance company doesn’t owe you a contract, however, and will not insure your household if you cannot provide important information.
In most cases, the failure to disclose is a violation of the terms of the contract. Expect the policy to be canceled as a result of not answering certain questions.
Also bear in mind that the National Highway Traffic Safety Administration (NHTSA) requires insurance companies to ask for this information, as this shows the company to be a legitimate and licensed insurance provider.
Since the insurance company is required to ask about the people in your household, they must be given an answer pertaining to all members of the immediate family, and their driving history. This information will help the company to assign a proper auto insurance rating, and will ultimately decide the amount of risk involved.
Always answer questions truthfully. After all, you as a primary motorist want to disclose any possible scenarios to the insurance company well in advance of a contract being signed. Whenever a surprise scenario occurs (something not listed on the policy) then it is usually not covered.
Not truthfully answering questions is tantamount to misrepresentation. This will result in a denial of all claims and a cancellation of the policy.
In the end, this provision protects the insurance company and your household. You can start looking for an insurance carrier right now. The third party rate quote tool below lets you find insurance companies that offer multi-discounts for family members. You can use it now!