Guys I need your help understanding the concept of additional/occasional driver on an existing auto insurance policy. My friend wants to add 19 year old son as occasional driver to the existing policy under his name. Plan is to keep son as occasional driver for couple of years before he can buy insurance on his own name.
He was quoted additional $ 2400/year.
However during casual discussion at a gathering, someone mentioned that there is no need to add son’s name on insurance policy. Son can drive father’s car as long as car is insured. In case of at fault accident, father’s insurance company will cover the expenses and his insurance will go up whereas accident will be a hit to son’s driving record. This is no different than having son’s name on the policy with the exception of additional expense of $2400/year. Obviously given a choice, you want to go a option that saves money.
Now I think this can’t be that straightforward. I have a feeling that something is missing here but not sure what? I was always under the impression that you need to, by law, add person to existing policy if he/she will be driving the vehicle. This ensures the entitlement of benefits in case of an accident.
Any thoughts?
I believe it your son lives at your address and uses the car occasionally, then HE HAS TO BE LISTED on the insurance policy as an occasional driver.
To read more about Car Insurance and clear doubts about your situation follow this http://ibc.ca/en/Car_Insurance/Introduction/Lending_Borrowing_Car.asp
Excerpts from the above link:
If you are lending your car
You must consent to its use by the other driver.
The person who borrows your car cannot be using it as part of a regular routine. 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.
The person to whom you lend your car must be a licensed driver who is legally allowed to drive in the province.
If the person borrowing your car has an accident while driving your car, it goes on your insurance record. When you lend your car, you are also lending your good driving record.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
What about both, husband and wife driving the same car. How does that work out? If both are driving, e.g. on a 50% basis - half the time it's husband driving and the other half wife is.
Car insurance companies will definitely create a problem if the car is in accident as important information about number of drivers in the household was not disclosed.
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Quote:
Originally posted by febpreet
What about both, husband and wife driving the same car. How does that work out? If both are driving, e.g. on a 50% basis - half the time it's husband driving and the other half wife is.
This is not very simple but I will try to explain in detail below.
All persons living in the same household (at the same address) who have valid driving license would be treated as driving that car irrespective of the fact whether some one actually drives it or not.
So, if you have a car which is registered in your name, you are the principal driver of that car and if your spouse has a driving license, your spouse automatically becomes the 2nd driver of that car. Now, if your son or daughter takes a driving license and lives with you in the house, he or she would automatically be treated as an occasional driver of that car and it would have an impact on your insurance and your monthly payments may go up. The increase would be more in the case of your son than in the case of your daughter.
Now consider the scenario that you bought another car which again is registered in your name. Now even though both cars are registered in your name, you would be principal driver only in 1 car and 2nd driver or the other car, while your spouse would be the principal driver on the other car and 2nd driver on your 1st car. And your son or daughter would be occasional driver on both the cars.
Lets go even further. Lets say your spouse does not have a license but your son or daughter has a valid license and you have only 1 car. Then you are principal driver in your car and your son or daughter will be the occasional driver in the car. Now if you buy another car in your name, then your son or daughter would be treated as the principal driver on the 2nd car and occasional driver in the 1st car and you would be principal driver in your 1st car and occasional driver in the 2nd car.
Now God forbid, if your son causes an at fault accident on any of the cars, it would also show in your record and on the car which was involved in the at fault accident. Now this would be taken off from your car and your record only if your son buys his OWN insurance and is rated on that accident. Till such time, you would have to pay extra premiums.
I hope it is now clear as mud
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Quote:
Originally posted by rajcanada
Car insurance companies will definitely create a problem if the car is in accident as important information about number of drivers in the household was not disclosed.
No. of drivers in the household could more but if I am giving my car on loan basis to a family member (say once in week in a irrregular pattern), will that be a problem?
Also, my wife does not drive my Van even occasionally. However, she drives it probably 2-3 time in a year in case of emergency. Will that be considered car loaning? If so, Can I remove her name and potentially save some money.
I know I can find this out from my insurance company but let's see what CD's think abt this.
Pramod Ji,
Thanks for the response.
Location: British Columbia
Posted on: 14-10-10 10:26:03
I dont know if it differs province to province in this regard, however there are also instances where your car insurance will specifically be only for drivers with over 10 of years of driving experience. This lowers your insurance rates. I am just speaking from my own experience. My car's insurance does not allow drivers with less than 10 years driving experience to drive it.
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