When it comes to buying auto insurance, many people don't realize that the members of the household can have a direct effect on the premiums that you pay. Even if you don't list someone as a covered driver on your policy, many insurance companies will still include their driving history as part of your premium. This is the result of a household risk analysis. It involves a thorough search of public records to identify every licensed driver at your address. Your policy will then be adjusted based on the driving histories of any uninsured licensed drivers in your house. Here's what you need to know about this insurance company policy and what your options are.
Why Does Your Insurance Company Do This?
Some people are upset when they receive a notice like this from the insurance company. What they don't understand is the logic behind the policy. The insurance company determines your premiums on the level of risk that you pose to the company. That risk is based on your driving record, your credit, and several other factors. If there is someone in the house without insurance, the insurance company considers them to be a risk factor. As long as they could potentially have access to your car, the insurance company will want to be sure that their risk is accounted for. If they aren't insured through any other company, your insurance company will cover them and charge you accordingly.
How Can You Avoid This Situation?
If your insurance company has identified an uninsured driver in your home, you'll need to list them as an excluded driver on your policy. That means they are clearly identified as being excluded from coverage under your policy. This eliminates any risk for the insurance company because it eliminates any claim that driver could file.
Another way to prevent this additional charge is by having that driver purchase their own insurance policy. If they are covered through another policy, no matter the company it's with, your insurance company won't see them as a risk.
How Do You Deal With Exclusions Later?
If you've had a household member listed as an excluded driver, it doesn't have to be a permanent thing. In most cases, the reason you had to exclude the driver to begin with was because of a specific incident on the individual's driving record. Ask your insurance company how far back they review when assessing driving risk. If it's five years, you'll be able to remove that person from the excluded driver status five years after the incident in question.
For more information, contact companies like Northeast Insurance Agency.