Insurance Rules for Multiple Drivers in the Same House
Restricted Policies vs. Broad Coverage
- Restricted auto insurance policies only provide coverage when the vehicle is being driven by a party whose name appears on the policy. Broad coverage is more lenient, and will often offer coverage to the driver, his or her spouse and children, and any family members related by blood. Broad coverage may also extend to friends who operate the vehicle with the permission of the insured. Consult your policy jacket, which is the document accompanying your insurance policy that explains what is and isn’t covered. You should also review your policy declarations, which are the forms issued at each renewal that show the names of the covered drivers on your policy and the vehicles covered. You are strongly encouraged to contact your insurance company for details about who’s covered by your insurance policy as this will vary from company to company and from state to state.
Multiple Vehicles with Multiple Drivers
- Insurance companies commonly issue multi-vehicle policies that provide equal driving privileges for all of the drivers named on the policy. This means that a mother, father and teenage child would all be authorized to operate one another’s vehicles without restriction. Drivers should keep in mind that the coverage follows the vehicle, not the driver. This means that if a father’s Chevrolet has full coverage and his daughter’s Ford is covered with liability only, the father will only have liability while driving his daughter’s vehicle. (Liability coverage pays for the property damages and bodily injury incurred by others when you’re at fault in a covered accident. Full coverage pays for your vehicle and the vehicle owned by the other driver when a covered accident occurs.)
It is becoming increasingly uncommon for insurance companies to assign drivers to specific household vehicles, as they have found that this makes it very difficult to settle claims. By assigning vehicles, insurance companies acknowledge that they restrict the family’s options when emergencies arise.
Children Who Aren’t on the Policy
- It is important to remember that insurance rates are based on “risk,” or the likelihood that an accident involving someone on your policy will occur. That is why rates increase when teenage drivers are added to insurance policies. However, many companies extend coverage to the children of covered drivers whether they are on the policy or not. This is done in order to comply with industry-wide standards that typically provide coverage to a policy holder’s children.
Despite their standard practice of covering teen drivers who aren’t on the policy, most insurance companies still request that parents add their teen drivers to their insurance policies to ensure that they are collecting adequate premium for each driver. These companies may also reserve the right to deny claims if they believe a parent has concealed information about a teen driver in the household. To be sure that your teen driver’s claims will be covered, add them to your policy as soon as they are eligible to drive.
Spouses & Adult Family Members Who Aren’t on the Policy
- Many insurance companies use broad language in their insuring agreements stating that a covered driver, or the “insured,” under the policy includes drivers named on the policy and any family members related by blood. This could extend to your spouse or adult family members who live in the home. For this reason, your insurance agent may tell you that it is okay to lend your vehicle to adult family members who live in the home, even if they aren’t named on the policy. If an accident occurs while your spouse or family member is driving, your insurance company is likely to pay for damages unless a claims investigation reveals an extenuating circumstance. (Such circumstances may include, but are not limited to, vehicle operation during the commission of a crime.)
Friends Who Aren’t on the Policy
- Broad coverage offers coverage to friends who aren’t on the insurance policy as long as someone who is insured on the policy has granted them permission to drive. Restricted coverage would not provide coverage to a friend who borrows your vehicle, even if you give him permission to drive. If your friend has his own insurance policy, his coverage is likely to pay for any accidents that may occur while he is driving your vehicle.