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- Car insurance companies typically require a policyholder to list all licensed drivers in their household.
- Anyone you live with has access to your vehicle, so the insurer wants to know the risk associated with that driver.
- Tenants and roommates should be listed on your car insurance policy.
When it comes to who lives in your house, your car insurance company will want to know whether you have roommates or tenants living with you.
Though it may seem odd to list someone not related to you on your car insurance policy, it is normal for car insurance companies to require a policyholder to list all other licensed drivers who reside in the same household. This means anyone you share the same address with, relatives, roommates, friends, or strangers who rent out a room in your house.
People in your household have access to your car keys and vehicle; consequently, your car insurance company wants to determine what type of risk it is exposed to.
Should you add a roommate to your car insurance policy?
Adding a roommate to your car insurance policy is essential if they frequently drive your car, as it ensures they’re covered in case of an accident. However, it may increase your premium, especially if you have a poor driving record.
Occasional vehicle use by a roommate is usually covered, but the risk is failing to disclose a roommate who regularly drives your car. If they are regularly using your car and are not listed on your policy, your insurer could deny the claim or limit coverage after an accident.
When you sign up for an insurance policy, the insurer rates the policy on the driving records of all household members — it’s a material misrepresentation to fail to disclose pertinent rating information.
A material misrepresentation occurs when a policyholder provides false or misleading information that impacts the insurer’s decision to issue or price a policy. This could include underreporting miles driven, misrepresenting the primary driver or omitting details about previous accidents.
Such misrepresentations are considered “material” because they affect the insurer’s risk assessment. If discovered, the insurer can deny claims, cancel the policy, or even void coverage, leaving the policyholder financially responsible in case of an accident.
What is the definition of a household member?
Do you need to add tenants to your auto insurance policy?
You must notify your car insurance company that you are renting out rooms in your house. Likely, your auto insurance provider will ask for the renters’ driver’s license numbers and other information. This would be true if the people were renting rooms in your house or were roommates in an apartment.
Can I exclude tenants from my car insurance policy?
If you don’t want to add roommates or tenants to your car insurance policy, you may be able to list them as excluded drivers. However, some states, including Michigan, New York, Kansas, Wisconsin and Virginia, may not allow named driver exclusions, so check your state’s rules and your insurer’s requirements.
When you exclude someone from your policy, it means you don’t pay for them as a driver on your car, and in return, your car insurance company will not extend any coverage to them if they drive your car. This means that if there was an emergency and a renter had to use your car and was in an accident, your car insurance policy wouldn’t cover the accident under the exclusion.
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Final thoughts on adding tenants and roommates to car insurance
Once your car insurance company is aware of all your household members, it’s up to state laws and the guidelines of your auto insurance provider to determine if the renters will have to be listed on your policy or not. But it’s necessary to communicate important details about possible drivers to your insurer.
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