Orlando Harmon
Auto insurance companies have various ways of identifying potential operators. Firstly, they require all licensed drivers living in the same household as the policyholder to be listed on their auto insurance policy, regardless of whether they are related or not. Additionally, anyone who does not live with the policyholder but drives their car occasionally or regularly also needs to be listed. This includes, for example, a neighbour who uses the car once a week for grocery shopping.
In some cases, drivers who only have a learner's permit are not required to be listed on the policy until they obtain a full license. However, if they are involved in an accident, the policy will still respond as long as they have their permit and a licensed driver is present in the passenger seat.
Furthermore, auto insurance companies may also obtain information about potential operators through data sharing with automakers and global data brokers like LexisNexis. This data includes details such as trip dates, distances driven, and driving behaviour such as speeding, hard braking, or rapid accelerations.
| Characteristics | Values |
|---|---|
| Auto insurance company policies | Owner's policy, operator's policy, or a combination of the two |
| Who needs an operator's policy | Drivers who don't own a car but drive someone else's car regularly |
| Who needs an owner's policy | Owners who are named insured |
| Who needs to be listed on your auto policy | All licensed drivers living in your household, whether related to you or not |
| Who else needs to be listed | Anyone who does not live in your household but occasionally or customarily drives your car |
| Who doesn't need to be listed | Drivers with a learner's permit |
| Who else doesn't need to be listed | Drivers who will never drive your car, even to move it in the driveway |
| Auto insurance companies | USAA, Auto-Owners, Nationwide, State Farm, Geico, American Family, Progressive, Erie Insurance, Allstate, Farmers |
| Auto insurance company discounts | Multi-policy, paid-in-full, safety features, student, anti-lock brakes, anti-theft system, new vehicle, good driver, seat belt use, defensive driving, good student, emergency deployment, membership and employee, multi-vehicle, multi-policy, auto safety equipment, low mileage, pay-how-you-drive, generational, customer full pay, paperless, and more |
What You'll Learn
- Auto insurance companies can access data on consumer driving behaviour from automakers
- Insurance companies require all licensed drivers living in the same household to be listed on a policy
- Drivers who only have a learner's permit are not required to be listed on a policy
- Discounts are available for safe driving behaviours
- Insurance companies offer different types of insurance, such as non-owner insurance
Auto insurance companies can access data on consumer driving behaviour from automakers
For example, a 2022 New York Times article detailed how a driver of a leased Chevy Bolt EV saw his insurance rates increase by 21% after his driving habits were shared with his insurer. The man claimed that he had no idea his information was being tracked and shared. This practice, known as usage-based insurance, is becoming more common with internet-connected cars, and drivers may not always be aware that they have agreed to share their data.
The data collected by automakers includes information such as hard braking, hard acceleration, speeds over 80 miles per hour, average speed, late-night driving, trip details, and the number of miles driven. This data is then analysed by data brokers like LexisNexis to create risk scores for drivers. These scores are used by insurance companies to set insurance rates.
While some drivers may be aware that their data is being collected, they may not realise the extent of the data collection and that it can be shared with third parties. This has raised privacy concerns, with investigations being conducted into automakers' data collection and sharing practices.
In addition to data collected by automakers, insurance companies also obtain information from other sources, such as driving records and accident reports. This information is used to assess the risk associated with a particular driver and set insurance rates accordingly.
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Insurance companies require all licensed drivers living in the same household to be listed on a policy
When purchasing car insurance, it is important to disclose all household members, as insurance companies use this information to analyze the risk and determine the yearly insurance premium. This includes listing all licensed drivers in the household, such as friends, neighbors, live-in nannies, older licensed children, and other family members who may drive the car. However, it is not necessary to list unlicensed children or teenagers below a certain age, usually 14 years old.
In addition to household members, it is also essential to list anyone who drives the car regularly, even if they don't live with you. This could include a spouse, aging parent, or friend. If an unlisted driver is involved in an accident while driving your car, the insurance company may deny the claim, leaving you financially responsible for any damages or injuries.
It is always better to be safe and list all drivers on your policy to ensure adequate coverage and avoid any potential issues or financial consequences. By doing so, you can have peace of mind knowing that everyone is protected in the event of an accident.
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Drivers who only have a learner's permit are not required to be listed on a policy
Auto insurance companies need to know about potential operators of insured vehicles to assess risk and determine premiums. Generally, all licensed drivers living in the same household as the insured vehicle's owner must be listed on the policy, whether or not they will be driving the car.
However, drivers who only have a learner's permit are not required to be listed on the policy. This is because they are not yet fully licensed drivers and must be accompanied by a fully licensed driver when operating a vehicle. Once a learner driver obtains their full license, they will need to be added to the policy.
It is important to note that insurance policies may vary, and it is always best to check with the insurance provider directly to confirm their specific requirements and guidelines regarding listing drivers with learner's permits.
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Discounts are available for safe driving behaviours
Auto insurance companies offer discounts for safe driving behaviours. For example, State Farm's Drive Safe & Save program offers a discount of up to 30% on auto insurance. The program uses either a smartphone app or a connected car to track driving information such as smoothness to calculate the discount. Other companies like Nationwide and Travelers Insurance also offer safe driver discounts. These discounts are typically for drivers with a record of clean driving for a specified period, usually at least five years. Factors that insurance companies consider when determining eligibility for safe driver discounts include no at-fault accidents, no major comprehensive claims, and no points on the driver's license from moving violations such as speeding or reckless driving.
Safe driving behaviours that can help maintain a clean driving record and qualify for safe driver discounts include obeying speed limits, avoiding reckless driving, and not driving under the influence of drugs or alcohol. Maintaining a safe following distance, using turn signals correctly, and yielding when necessary are also important safe driving practices. By adopting these safe driving behaviours, drivers can not only reduce the risk of accidents and keep themselves and others safe but also benefit from lower insurance costs through safe driver discounts offered by auto insurance companies.
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Insurance companies offer different types of insurance, such as non-owner insurance
Auto insurance companies offer different types of insurance, including non-owner insurance. This type of insurance is designed for people who don't own a vehicle but still need insurance coverage. For example, this could include those who regularly rent or borrow cars, or those who need to prove they have insurance coverage, such as by filing an SR-22 or FR-44 form. Non-owner insurance provides liability coverage for bodily injury and property damage caused by the policyholder while driving. This means that it covers the cost of damages or injuries that the policyholder is liable for in the event of an accident. It is important to note that non-owner insurance does not cover damage to the vehicle being driven or the policyholder's own injuries.
Non-owner insurance policies are typically secondary policies, meaning they act as additional coverage if the primary insurance of the vehicle owner is insufficient. For example, if a non-owner policyholder borrows a car and causes an accident, the primary insurance of the car owner will pay out up to its limits, and then the non-owner policy will cover the remaining costs, up to its own limits.
Non-owner insurance policies may also include other types of coverage, such as medical payments, personal injury protection, and uninsured or underinsured motorist coverage. These additional coverages can provide protection for the policyholder's own medical expenses in the event of an accident, regardless of who is at fault.
The cost of non-owner insurance varies depending on factors such as age, driving history, location, and coverage limits. However, it is generally less expensive than standard car insurance policies.
In addition to non-owner insurance, auto insurance companies also offer other types of insurance, such as owner's policies and operator's policies. An owner's policy protects the owner of the vehicle as the named insured and typically covers other drivers using the vehicle with the owner's permission. On the other hand, an operator's policy provides coverage for drivers who don't own a car but drive someone else's car regularly. This type of policy insures the driver rather than the vehicle, providing coverage no matter what vehicle is being driven.
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Frequently asked questions
Yes, auto insurance companies can access driving data through third-party services like LexisNexis, which generates consumer risk profiles for insurers. This data includes information on driving speed, braking, and acceleration.
Auto insurance companies consider anyone who drives the insured vehicle a potential operator. This includes all licensed drivers living in the same household, as well as individuals who occasionally or customarily borrow the car.
An owner's policy protects the owner of the vehicle as the named insured. On the other hand, an operator's policy provides coverage for drivers who don't own a car but regularly drive someone else's vehicle.
Yes, if you need to list a driver on your policy but they will never drive your car, you can exclude them. Both you and the listed driver must sign an exclusion form for this to take effect.
A named operator policy, also known as a non-owner's policy, is for individuals who don't own a vehicle but require liability auto insurance coverage. This may be due to work requirements, license reinstatement, or as secondary coverage when borrowing a vehicle.
