Car Insurance: Co-Drivers And Coverage Requirements

Whether a co-driver needs to be insured depends on the insurance policy and the state in which the insured resides. In some cases, insurance policies cover the vehicle, while others cover the driver. Generally, insurance policies require that any regular drivers of a vehicle be added to the insurance policy to ensure coverage in the event of an accident. This can be done by adding a driver to an existing policy or obtaining a separate insurance policy for the co-driver. It is important to review the specific terms of an insurance policy and understand the requirements and coverage limitations to ensure that all drivers are properly insured.

Permissive use

Most large-scale car insurance providers offer permissive use coverage, but not all. Some companies only cover drivers listed as "active drivers" on the policy. It is important to review the policy details to understand if and how permissive use is covered. For example, a policy may only cover a permissive driver if they borrow the car 12 or fewer times a year.

If a permissive driver is involved in an accident, the policy may pay for the damages and injuries, up to the coverage limits. However, if the permissive driver is also insured, their auto insurance could also pay out, depending on their policy and the details of the accident.

There are some situations in which a permissive driver may not be covered by the policy. These include:

• The driver took the car without permission (non-permissive use)
• The driver is unlicensed
• The driver is specifically excluded from the policy
• The car is being used for business purposes
• The car is being used for criminal activity
• The driver is using the car to cause intentional damage

Non-permissive use

In general, car insurance follows the car and not the driver. This means that if you give someone permission to drive your car, your auto insurance may pay for any damages and injuries resulting from an accident, up to your coverage limits. This is known as "permissive use". Permissive use typically applies to people who are not listed on your insurance policy and who do not reside at your address, using your vehicle infrequently (usually defined as less than 12 times per year).

However, there are situations where your policy may not cover the accident, and this is known as "non-permissive use". Non-permissive use occurs when a driver borrows your car without your permission. In this case, the driver's insurance may be responsible for the damages and injuries resulting from the accident.

It is important to note that not all insurance policies cover permissive use, and there may be exceptions and exclusions. For example, permissive use may not cover unlicensed or inexperienced drivers, and some policies may only provide limited coverage or require increased deductibles for permissive users. Additionally, if your car is used for business purposes, your policy may not cover it unless you have a specific endorsement for business use.

To ensure that you have the correct coverage, it is important to review your policy details and discuss any questions or concerns with your insurance agent.

Adding a driver to your policy

Adding a driver to your insurance policy is a fairly simple process, but it's important to understand the implications of doing so. Firstly, it's crucial to determine if the additional driver needs to be added to your policy. Generally, you should include licensed drivers who live in your household, have regular access to your vehicle, or drive it regularly. This could include a spouse, partner, teenage or college-aged children, roommates, or even a friend who drives your car frequently.

By adding a driver to your policy, you ensure that your insurance company will cover any accidents or claims involving that person when they are driving your vehicle. This provides financial protection for both you and the additional driver. However, it's important to note that adding a driver may result in an increase in your insurance premium, especially if the driver is inexperienced or has a poor driving history.

To add a driver to your policy, you will typically need to provide the insurance company with their legal name, date of birth, gender, marital status, driving history, license information, and, if applicable, the Vehicle Identification Number (VIN) of their own vehicle if you plan to share a policy for separate vehicles. Most insurers allow you to add a driver by calling them, logging into your online account, or using their mobile app.

While adding a driver to your policy can provide peace of mind, it's worth noting that car insurance policies can vary. In some cases, your insurance may cover a driver who is not listed on your policy, such as in permissive use situations where you give permission to another licensed driver to borrow your car. Additionally, if you lend your car to someone without adding them to your policy, their own insurance may provide coverage in certain circumstances. Therefore, it's always a good idea to review your policy and consult your insurance agent or company for guidance on when and how to list a driver.

Excluded drivers

An excluded driver is a person in your household who has been explicitly excluded from coverage under your car insurance policy. Their name will show as "excluded" on your policy, and they won't be insured to drive any vehicles on your policy. A rated driver, on the other hand, is a member of your household who is of driving age and covered by the policy when using the insured car(s).

Excluding high-risk drivers who live with you may be a good idea. For example, you could consider excluding an adult with a bad driving record, such as a history of accidents or violations. Drivers with these violations typically pay more for insurance than people with clean driving records. Excluding a risky driver from your policy may help you save on auto insurance. You may also want to exclude elderly relatives or roommates who no longer drive because it isn't safe for them to get behind the wheel.

It's important to note that not all states allow policyholders to exclude household members from coverage. Some states specifically don't allow named driver exclusions at all. Other states may allow exclusions but require them to have their own auto insurance before they can be excluded from your policy. And other states may place restrictions on which drivers or coverages can be excluded. Be sure to check with your insurer.

If you exclude a driver from your policy, they are not covered when they drive your car under any circumstances—even in an emergency. If they get behind the wheel and are involved in an accident, your insurance company likely won't cover any losses, and you could be held liable for damages.

While it's generally discouraged, some insurance policies may offer limited emergency coverage for excluded drivers. It is crucial to clarify this with your insurer and understand the specific terms and conditions.

Insurance for commercial use

In the US, commercial auto insurance is necessary for companies as it provides liability protection in case of work-related accidents involving employees. Commercial insurance covers any vehicles used for business purposes and any employees driving them. It covers damages, medical expenses, and legal costs up to the policy limit. This type of insurance is regulated by each state, and failing to carry adequate coverage could result in fines and lawsuits.

Commercial and personal auto insurance differ in terms of vehicle ownership and usage. Commercial insurance typically covers vehicles owned by the business, while non-owned vehicle insurance (HNOA) protects vehicles used but not owned by the company. For instance, if employees need to rent cars for work travel, HNOA would be applicable. Commercial insurance also covers all employees with valid driver's licenses as long as they are driving a covered company vehicle. In contrast, personal auto insurance covers vehicles for personal use, such as commuting or running errands, and usually extends to immediate family members.

The cost of commercial auto insurance depends on factors such as the size of the business, the number and type of vehicles, the number of employees driving, the desired coverage level, and work-related driving risks. The median price is $142 per month, but it can be lower or higher depending on these variables. It is recommended to consult a licensed insurance agent to determine the specific requirements for your business.

In the UK, any vehicle driven on roads is legally required to have the minimum level of insurance, which extends to vehicles used for business purposes. This includes company cars, taxis, minibuses, HGVs, trucks, lorries, and fleets. The minimum level of insurance is third-party insurance, which covers damage or injury to other persons, vehicles, animals, or property in an accident. However, it does not cover repairs to the insured vehicle. Businesses can also choose from Third Party, Fire & Theft or Comprehensive insurance, which offer varying levels of protection.

Frequently asked questions