Article 2 of 4 in Car Insurance for Loaned, Borrowed, and Rented Cars
Every now and then, you allow someone else to drive your vehicle. Whether for the convenience of running an errand or because you have hired them to take care of you or your children. Depending on the relationship you have, the reason for them driving your car, and how often they will drive your vehicle, you may need to add them to your car insurance policy or have them get their own policy for your vehicle.
TIP: If you do not list the driver on your car insurance policy, and you are required to, be prepared to face the possibility of non-renewal or cancellation of your policy. Ask your insurance company if you need to add your personal employee to your car insurance policy.
Insurance for Occasional Users
If you occasionally allow someone like a roommate or a spouse to drive your car, then you probably do not need to take the step of adding that person to your car insurance policy. In such a case, you are lending someone your car and they should be covered by your car insurance policy. A car insurance policy runs with the car, and will cover you vehicle regardless of who is driving it as long as you gave permission. If the person driving your vehicle is involved in an accident, you could see your premium payments go up even though you were not driving, so be careful about lending your car to people!
Insurance for Your Personal Employees
Insurance companies always want to know about all drivers in a household. Therefore, if you have hired a nanny, driver, or other personal employee to regularly use your car, you should call your agent or your insurance carrier and let them know that this person is an approved driver on your car insurance policy. They should be listed on your insurance as a member of your household and a driver of your car. The insurance company will review their driving record, and can adjust your premium payments accordingly.
If the nanny, au pair or other hired help is only working for you for a short time, it may be best just to grant her permissive use of your vehicle which would give her coverage. Make sure that this driver is considered a legally license driver under your policy for your state.
TIP: Because your insurance company will factor driving history of all listed drivers into car insurance rates, you might want to make a good driving record a condition of employment---not only for your insurance rates but for the safety of your kids and others.
How to Add an Authorized Driver to Your Car Insurance Policy
Start by checking with your agent or auto insurance carrier prior to hiring the driver to see exactly what your policy provides and the cost to add an authorized user on your insurance policy. You will need to know the following:
Sometimes your auto insurance agent can obtain this information for you, but some states do not allow this. Since the driver is using your personal car, you will be responsible for paying any damage in the event of an accident while driving your car.
TIP: Always remember, if someone else crashes your car as well as cause property damage or injury, you can be held financially liable. Therefore make sure you know the driver and his driving record before advising your insurance company that this person will be driving your car on a regular basis.
Having a personal employee drive your vehicle is convenient, but make sure to call your insurance company or agent to see what coverage, if any, that person needs. It could make the difference between you being financially liable for an accident of injury and having insurance coverage. If your insurance company increases your premium payment significantly, you can compare other car insurance policies and find the best one that works with you.
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