Disclosing Additional Household Residents to Auto Insurance Company
In California many insurance companies will inquire about additional household residents
that live in the home at the time that the insured purchases a policy. Often times, these companies will also mail the insured a written request upon renewal to check if there are additional household residents.
The majority of auto insurance policies that are sold in California offer coverage that extends out to other operators that are not named on the policy. This is called permissive use coverage and generally extends to non household residents that occasionally use the vehicle for a short amount of time.
When shopping for an auto insurance policy is it very important that the consumer discloses all of the residents of the home. With most insurance companies any person that lives in the household will need to be listed as an excluded operator or be listed on the policy as a driver. When listed as an additional driver the premium will be rated appropriately by factoring the driving experience and record of the additional drivers. When listed as an excluded driver the policy will state that these people specifically will not have any coverage.
The reason that the insurance company does this is to ensure that the appropriate premiums are being charged on the auto insurance policy to so that the company can maintain profitability. A good example is if a parent purchased a policy and did not disclose that they had a newly licensed child living in the household. If the newly licensed driver were to be rated on the policy the premium would be significantly higher than if not. These premiums would need to be higher because of the additional exposure that the insurance companies has by having a newly licensed operator driving the vehicle.
Consumers should make sure that all household residents are disclosed to their insurance company. Even though these residents may not be listed as specifically excluded most insurance companies protect themselves in the insuring agreement of a policy stating that the permissive use coverage does not extend to household residents.
Disclosing Additional Household Residents to Auto Insurance Company
