Auto insurance policies allow you to add a driver to your policy — they might even require it. Below are some of the situations in which the addition is merited.
To Satisfy Carrier Requirements
Your auto insurance company requires you to add some members of your household to your policy. Your carrier may require you to add every household member that meets the following criteria:
If your carrier has such a requirement, then you commit insurance fraud if you don't add such drivers. Your carrier might refuse to renew your coverage if they learn of your fraud.
To Enjoy Low Rates
If you are the only driver on your auto insurance policy, then your auto insurance risk is the only one that affects your insurance rates. If you have multiple drivers on a policy, then the effective rate depends on the insurance risks of all the drivers on the policy.
This principle of rate determination means that risky drivers can benefit from safe drivers by being on one policy. For example, a parent with a safe driving history can enjoy better rates compared to a teenager if the two have separate insurance policies. If the parent adds the teenager to their policy, then the teenager benefits from the parent's lower risk. The combined policy would likely be cheaper than individual policies.
To Create and Maintain Insurance History
Auto insurance companies determine your risk exposure by evaluating your driving history. Thus, a short or non-existent driving history doesn't give the carriers adequate data to determine your risk level. You have no option but to pay slightly higher rates if you don't have a solid coverage history.
Thus, if you have someone who doesn't have auto insurance, you can include them in your coverage to help them get coverage history. The same logic applies to someone who has lost their coverage due to something like inadequate finances. You can add such a person to your policy and help them avoid a gap in coverage.
To Protect Yourself in Case of an Accident
Lastly, you should add everyone who has regular access to your car to your policy. Do this even if the insurance company doesn't know about such drivers. This addition is to your own benefit in case such drivers cause an accident with your car. If you don't do that, then you might be on the hook for an auto accident an uninsured driver might cause with your car.
To learn more, contact an insurance agency.
Purchasing insurance — the right insurance — is one of the smartest things you will ever do. While there are definitely differences between homeowners, car, life, and health insurance policies, they all serve the same purpose when it comes down to it. Insurance protects you against financial ruin should a tragedy happen in your life. In the case of homeowners insurance, that tragedy could be a fire or a flood. In the case of life insurance, that tragedy would be your death. The more you learn about insurance, the better the decisions you'll make when purchasing it. So dive into the articles here, and start reading.