Why Every Household Driver Should Be On Your Auto Insurance Policy

In Nevada, auto insurance policyholders are allowed to exclude specific members of their household from their insurance policy. While this may seem like a smart way to save money on your monthly premium (for example, adding your teenage son on your policy may greatly affect your premium), it’s rarely a good idea.

Who Are the Members of My Household?

Generally speaking, anyone who lives with you that has a driver’s license (whether they’re a family member or not) is considered by your insurer to be a member of your household. In most cases, anyone who drives or has access to your car on a regular basis should be on your auto insurance policy. This may include anyone you live with who has a driver’s license, including your spouse, roommates, or licensed children. You may also choose to add friends or family members who are not part of your household to your policy, especially if they drive your car on a regular basis.

College students away from home without a vehicle aren’t required to be on a policy. They can be a “permissive” driver, meaning, if visiting home for the weekend, holidays, or school breaks, you would “permit” them to borrow your car to run an errand.

Emergencies Arise

While you may think that there’s virtually no chance that you’ll hand your car keys over to a household member that’s not listed on your policy, the fact is that emergencies happen. They may need to use your vehicle at some point and ensuring that they have the full benefits of your policy is essential for your own financial security. It’s important to make sure that all drivers in your household are covered by your insurance policy.

The Cost Of Adding A Driver To Your Policy

Your monthly premium is calculated using numerous factors, such as your age and gender, your driving record, and how much driving experience you have. When you add someone to your policy, their own information will be considered as well. If they have risk factors like speeding tickets or a lack of driving experience, then you can expect to see your premium increase. If their demographic information and driving history is very good, you may only see a small difference in your monthly payment.

The Responsibilities of Listed Drivers

Listed drivers can file auto insurance claims, including claims on your behalf, if you are severely injured in an accident and are unable to do so yourself. They can also follow through with the claim, set up car repairs, and communicate with your insurer without your involvement. Listed drivers cannot generally make changes to your policy, including adding or dropping listed drivers, adding or removing vehicles, or altering your coverage limits.

What Is “Named Insured” And Who Is It?

Your auto insurance policy is sprinkled with confusing industry jargon. For example, when you look at your policy’s declarations page, you’ll notice that it refers to the “named insured.” But who does that refer to? Is the term interchangeable with “listed insured?”

A named insured is basically the person who owns the car insurance policy; it’s the one who pays the monthly premium, enjoys the coverage protection that it provides, and has to authorize any changes made to the policy. In many cases, the named insured is the person whose name is on the vehicle’s title. In the event of an accident, they’ll be the one who works with the insurance agent, and it’s their name that will be on claim checks.

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Having More Than One Named Insured on a Policy

Generally speaking, only one or two people can be the named insureds on a policy. This is usually the case if the insureds are married or are both listed on a vehicle’s title. If a vehicle is titled to three or more people, then two people will be listed as the named insureds and the others would be referred to as additional named insureds.

Named Insured vs. Listed Driver

The named insured is the owner of the auto insurance policy, but they’re not the only one covered by it. Your policy may also outline specific drivers, which are usually referred to as “listed drivers,” who are also covered by the policy. However, listed drivers don’t have the same authority as the named insured. They can’t make changes to the auto insurance policy, and in the event of an accident, they can’t file a claim and they don’t have a say in the claims process. Listed drivers can be added to or removed from an auto insurance policy at the named insured’s discretion (as long as state laws or the insurance provider doesn’t prevent them from doing so).

Making Changes to Your Auto Insurance Policy

The named insured is the only one who can make changes to an auto insurance policy, but what if there are two named insureds and one needs to be removed?

Regardless of the circumstances, it’s important that a driver knows when they are being removed from an auto insurance policy. For this reason, it’s impossible to remove a named insured from a policy without their knowledge and consent. That person must be covered by a new auto insurance policy before they can be removed from the existing one.

Knowing who is listed on your policy as a named insured as well as who are the listed drivers is an important part of understanding your policy and its coverage limits. It can also help you avoid confusion and frustration if you need to file a claim with your insurer. Your auto insurance agent can help you review your policy to ensure that you fully understand your coverage.