A common source of confusion in the auto insurance world is the occasional driver (or additional driver). Many people have occasional drivers listed on their auto insurance policies. While your insurance premiums will take into consideration occasional drivers, having one with a clean driving record won't negatively impact your premiums all that much. However, if you have a high risk driver listed on your policy then you can expect your premiums to increase. So what can you do if a high risk occasional driver is causing your premiums to skyrocket despite your own clean driving record?
What is an occasional driver?
Any driver that lives in the same household as you will be listed as an occasional driver on your policy. Insurance companies require that you disclose all licensed drivers in your household as well as any other frequent drivers of your vehicle. If you do not disclose this information and that person has an accident in your vehicle, then your insurance company may have grounds to terminate your insurance agreement leaving you uncovered. This means that you could be financially responsible for all damages and injuries from the accident. Just as it is with primary drivers, the cost of the premium depends on the driving record and experience of the driver.
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What is a high risk driver?
Insurance companies rate drivers based on their driving record and insurance history. Insurers will look at a driver's records, history and experience and then make a judgment based on a variety of factors. These possible factors include being a new driver, having multiple traffic tickets, or multiple at-fault accidents. Serious law violations, such as impaired driving, will also likely put you in the high risk category. Even failures to pay past premiums can make you a high risk driver.
Can I exclude a high risk occasional driver from my policy?
Yes. The first, most extreme, option is to have the high-risk driver move out of the home. However, the "moving out" option is often not a reasonable option. Your second option is to formally "exclude" the driver from the policy. All you need to do is have both the policyholder and high risk driver sign this insurance form promising that the risky driver will never drive the vehicle—no matter what happens or the circumstances. With this in place, your premiums will no longer reflect the high-risk driver’s premium assessment.
It’s important to understand however, that if the high risk driver ever drives the car, he/she and your car will not be covered under any insurance. This will leave you and/or the driver responsible for all possible damage and injuries from an accident. And if they’re pulled over for a traffic violation, could lead to some serious fines and consequences. In a nutshell, this person must never drive the vehicle.
Can I still lend my car out?
You cannot loan your car to someone you have formally excluded. However, you are free to loan out your car to any other licensed driver as long as they're not using it as part of a regular routine. As the Insurance Bureau of Canada (IBC) writes: "If your friend uses your car every Friday to go grocery shopping, then he/she must be named on your insurance policy as an occasional driver." Just as if you were driving, this driver will be covered under your insurance. However, if that person gets in any accidents or incidents with your vehicle, it will go on YOUR record and YOUR premiums will be affected. As the IBC states, "When you lend your car, you are also lending your good driving record." Make sure to contact your insurance provider with any questions you may have.
If you or someone on your policy is a high risk driver, the most important thing is to take great care in being a safe and careful driver. Whether you're a high-risk or low-risk driver, insurance companies will have different rates so make sure to shop around for the best deals with InsuranceHotline.com.