Most families don’t think much about who is listed on their auto insurance until something changes. A child gets a driver’s license, someone leaves for college, an adult child moves back home, a relative temporarily moves in, or a boyfriend or girlfriend starts regularly driving one of the family’s vehicles. The problem is that your insurance company doesn’t automatically know when these things happen—and some of these changes can affect how your coverage works.
There’s a big difference between letting a friend borrow your car and having someone who regularly drives it. The same is true for people living in your household. Insurance companies generally want to know who lives in the home and who regularly has access to the vehicles. College students can be especially confusing. Whether they take a vehicle to school, leave it at home, live on campus, or attend college in another state can all be important information for your insurance company.
What many companies have started doing is limiting liability coverage to state minimums (ouch) when an unlisted driver has an accident especially if this is someone who
lives in your household that isn’t on the policy. In Oklahoma our state min coverage is 25/50/25. That’s 25k per person in injury coverage, 50k per claim total in liability and only 25k in property damage. As I said in my previous article cars are easily averaging around 40-50k per year, I have clients driving cars in excess of 100k in value.
The safest approach is simple: tell us when something changes. Don’t assume someone is automatically covered just because they’re a family member or because you gave them permission to drive the car. Let us know when someone moves into or out of your household, a child gets licensed, a college student moves away, or someone begins regularly using one of your vehicles. We can check the policy and make sure everything is set up correctly. That’s a much easier conversation to have before an accident than while you’re trying to get a claim paid.
Stay Tuned For Other Great Reads In This Month’s Newsletter
- Replacement Cost vs. Actual Cash Value: One Insurance Detail That Can Cost You Thousands!
- Is Your Auto Liability Limit High Enough for Today’s Accident Costs?
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