Question: I don’t understand why my wife’s auto insurer needs my information. I don’t drive, nor do I have a license. I get rides every place I go. Why are insurance companies so nosy about who lives in a house? What will it do with the information if it gets it? Will her rates go up?
Answer: Your wife’s insurance company is trying to accurately calculate its risk by gathering information on who besides your wife may potentially operate the insured vehicle. (See “Do I have to list my spouse on my car insurance policy?”)
The insurance company isn’t specifically picking on you. If your household contained a teenager who was of licensing age, or an elderly parent who used to be licensed, the auto insurer would still want to know; it mandates all household residents over a certain age (usually 15) are disclosed.
The auto insurance provider needs enough data points to decide if your household is a good fit for the company and, if so, what rates it should charge.
The insurer doesn't care about your home life. There isn’t a person going over your personal information looking for dirty details; instead the data goes into a computer program whose algorithm analyzes it to discern certain rating (risk) factors. This typically includes factors associated with:
- The vehicle – model, year, annual mileage, location, usage
- The driver(s) – gender, age, driving experience, driving record, claims record
- Insurance coverage selected – coverage types, limits, deductible
This isn’t a comprehensive list; you can read more about base rates and rating factors here.
You don't drive, but why?
Once an insurer is aware of all potential resident operators it can categorize them. The categories can vary by insurer, but tend to include groups such as licensed, unlicensed, unrated and excluded.
To place you into the correct grouping, auto insurance providers will want to know why you don’t have a valid license.
If you aren’t driving due to your driver’s license being suspended or revoked, then it’s very possible that the car insurance company will require your wife to exclude you, if possible, from the policy. An exclusion should make them feel comfortable they aren’t taking you on as a risk, and in return her rates shouldn’t be affected. (See “What is a named driver exclusion?”)
If you’ve never been licensed, then an insurer may still require you to be excluded, or instead just label you as unlicensed and unrated driver, so that you wouldn’t affect your wife’s premiums. It really depends upon state laws on and an insurer’s own guidelines what you will be categorized as.
If you aren’t going to drive your wife’s car, then normally you shouldn’t affect her rates because you won’t be on there as a rated driver. Just be sure not to drive her car – you won’t be covered.
If someday you obtain a valid driver’s license, then the car insurance company would need to be notified immediately -- and you’ll need to be added to the policy as a listed driver.
You being added to the policy would affect premiums. That would be a great time to comparison shop for car insurance rates. Premiums can vary by hundreds of dollars, if not much more, so finding the company with the right fit for your household could help you save – a lot. (See “3 ways to save big on car insurance”)