Before You Give Someone Your Keys

One of the most common questions we get at i.e. Insurance is “Can I just not insure my teen driver, room mate, or family member that lives with me?”  While the short answer is yes, that’s not the right decision for most people.  Statistics show that up to 30% of car accidents involve a driver that is not listed on the insurance policy. That can be a big problem for insurance companies and consumers.  If insurance companies aren’t getting the appropriate payment for the risks they are insuring, their only option to remain stable is to increase rates for everyone. The insurance industry works because people that have more accidents pay more money for insurance, while the people that have less accidents pay less money for insurance.

With accident frequency and severity on the rise (check out the 2021 NHTSA Report here), it’s a good time to understand this part of car insurance:

There are three types of drivers on a personal auto insurance policy in PA – a Rated Driver, a non-Rated Driver, and an Excluded Driver.

The first is a Rated Driver. A rated driver is someone that is insured to drive on the insurance policy. This is the type of driver you want in most cases.  This type of driver gets all the coverage on the policy. This is also the type of driver that will impact your insurance cost. The cost is based on things like the number of years driving and insurance history. This means that accidents, tickets, violations, and experience will all impact the cost of the insurance. This also means that discounts for safe driving, good grades or continuing education, and sometimes even occupation can offer lower insurance costs.

The second type of driver is a non-Rated driver. Only a few companies offer this option in PA, and typically this is for when people are unrelated but living in the same home, or related but carry their own insurance policy with another company. A non-rated driver that occasionally drives your vehicle would normally use their own auto insurance policy for liability claims, but the  coverage for your vehicle comes from your insurance. Of course, always check your specific insurance policy wording to know for sure because every insurance company has different rules. If someone is regularly driving a vehicle, they should be a rated driver on the insurance policy for that vehicle.

The third type of driver is an Excluded Driver. An excluded driver is someone that is NOT COVERED under any circumstance on your insurance policy. Most often, if someone lives at the same address as you, and you aren’t paying the costs to have them be a rated driver on your policy, then they are an excluded driver. Excluded drivers don’t usually cost anything to you, because there is no insurance protection for this person, or for your vehicle if this person is in an accident.

How does this relate in the real world?

On many occasions we talk with parents of young drivers that don’t have the best driving history, which causes the insurance cost for the whole family to increase dramatically. Parents always ask “Can I just not insure my teen on my insurance?” Technically the answer to that question is yes. But by not insuring your child on your insurance, not only do you not have coverage for repairing a vehicle that the child is driving if there is an accident, but you also don’t have the liability, uninsured motorist, or first party benefits either. This means that if that child is involved in an accident that is their fault (rear ending another vehicle), the insurance policy will not pay anything at all. This means you would have to pay this out of your pocket entirely.

Finally, an excluded driver doesn’t get access to the first party benefits or uninsured motorist coverage, so if your teen, room mate, or family member is riding in your car with you and you are involved in an accident that is NOT your fault, there is no coverage to pay for that person’s medical bills, pain and suffering, or damages.

What if the person doesn’t live with me but drives my car?

You’ll want to check your actual insurance policy to get the guaranteed answer, but 99.9% of the time, if someone has regular access to your vehicle, they should be a rated driver on the insurance policy, especially if they are a relative. If you fail to list a regular driver on your policy and a claim happens, not only can the insurance company say no to paying for the claim, they can actually cancel your insurance policy entirely for ‘material misrepresentation’. That’s a big deal, as companies can actually cancel your insurance back to the start date of the policy (refunding the money you paid of course) which can leave you with huge gaps in your insurance and no coverage.

Have a conversation with your insurance agent about what exactly ‘regular’ use is, as that also is something that varies from company to company, but as a rule of thumb, if a person is driving your vehicle a defined basis (every Friday, twice a month, one a month, during the month they are in town from out of state/country etc.) then they should be a rated driver on your insurance.

So, Why Would Someone Be Excluded Then?

Typically, we see driver exclusions in just a couple cases. The first is with aging family members that live with you but don’t drive and haven’t given up their driver license. They don’t ride in your vehicle, they don’t drive your vehicle, and they have their own insurance coverage. Second is for room mates where each person has their own insurance, and would never share a car. The third case is when a driver license is revoked or suspended and the person is not going to be driving or riding in the vehicles on the policy. We do have a few people that have chosen to exclude their teens from their policies due to accidents and claims causing the pricing to be unaffordable.

What Should You Take Away from This?

We totally understand the expense of insurance, especially when you are paying higher costs for younger drivers. You always have a choice as to who you want to be insured on your auto insurance policy, but trying to lower your costs by not insuring someone that you should can have dire consequences. At i.e. Insurance, we’re always here to help our clients and potential clients navigate these and many other insurance questions. Just reach out to us at 724-719-2093, by email, or online at