How Unlicensed Household Members Can Affect Your Insurance

Are you living with someone else who has a driver’s license? Are you living with another adult who doesn’t have a driver’s license? How can living with someone else affect your car insurance, even if no one else drives your vehicle? Anytime you live with another person, your car insurance rates can change as a result.

How Can Another Person Change My Insurance?

Many insurance companies write what they call “household policies” for their customers. A household policy includes all drivers in the household, whether or not they actually drive your vehicle. Companies do this because any driver who has access to your car has the potential to drive it. If your fiancee’s vehicle broke down, for example, you might let your significant other drive your car instead. If you have a truck and your roommate needs help moving, you might offer your truck to help. As a result, anyone who has regular access to your vehicle is included when the insurance company calculates its risk and the cost of your policy.

Do I Need to Tell the Insurance Company about Everyone in the House?

When you apply for insurance, the application or the agent will likely ask about anyone else over a certain age who lives with you. Even if someone living in your house doesn’t have a driver’s license, you still need to let the insurance company know about them so the insurance company can decide how to handle the situation. If the company finds out later that you didn’t let them know about other drivers, they might cancel your policy or refuse to pay a claim if something happens.

How Can an Unlicensed Person Affect My Insurance?

If you are living with someone who has never had a driver’s license or has a suspended license, they may not affect your insurance at all. If you live in a state that allows excluded drivers, your insurance company will probably ask you to sign a form excluding the unlicensed person. By signing this form you are telling the insurance company that you will not let that person drive your vehicle under any circumstances. Your insurance will not cover him while driving your vehicle.

If you live in a state that does not allow excluded drivers, the insurance company might decide that having that unlicensed driver living in the house is too risky and not offer you an insurance policy at all. There are companies that will still offer you insurance, but you might have to shop around more to find decent rates.

In any case, avoid the temptation to keep any other drivers or non-drivers to yourself when the insurance company asks about other people living with you. Having an insurance company not cover you when you need it most isn’t a situation anyone wants to find themselves in.