When a consumer chooses a health insurance policy, he or she must decide exactly who is going to be covered and at what level. This is not true of automobile insurance. Legally, any automobile insurance plan must cover other adult drivers who are licensed and live within the same home.
Insurance policies often use language like “implicit coverage.” This covers any adult driver who is both licensed and a permanent resident in the same household. The additional drivers do not have to be family members or spouses. They can be partners or roommates who have regular use of the car.
It is required that the policy holder include the names of these drivers on the policy. The holder is listed as the primary driver. The other adults in the household are listed as secondary or occasional drivers. The policy holder must include these names regardless of how often the vehicle will be driven. Otherwise, the primary driver may be financially responsible for any accidents that occur.
Beyond the financial ramifications of not including licensed driver on a policy, there may be legal ones as well. Insurance carriers have a right to drop policies that are found to be fraudulent. Every Progressive insurance application asks about other licensed adult drivers in the household. If the policy holder does not include the names of other drivers, that application is not accurate. Insurance fraud is a serious issue. It could even lead to criminal charges.
The simple addition of these names should not raise the cost of the automobile insurance. However, the cost of insurance may increase as the rate of car usage rises. For instance, a car that is only driven 10,000 miles per year may have a much lower rate than one that is driven 20,000.
The cost of insurance does rise if an adult driver who does not share living quarters is added to the policy. This is an option sometimes chosen by divorced couples who continue to share vehicles. It is also an option for those wishing to grant use of their car to parents or adult children. The additional cost is rarely more than a few hundred dollars per year. However, a person who owns his or her own business should not use this option to insure employees. Business insurance is needed in this situation.
Unlike licensed adult drivers, placing newly licensed teenagers on a policy can significantly increase the cost of insurance. Teenage drivers may cost as much as $1,500 to insure when included on an existing policy. That cost can be lowered through a few factors. Sometimes, the child’s grades are taken into consideration. Those students who have better grades are often thought to be less of an insurance risk. Students who complete driver training courses are much more likely to have a lower risk assessment than those who do not.