Ensure Extended Insurance Coverage for Non-Resident Drivers

In This Article 

• When should I consider adding someone else, who lives elsewhere, to my auto policy? 

• How does my existing auto coverage apply to non-household drivers?

• What happens if I don’t add someone to my policy who regularly drives my car?

The standard rules of car insurance are built for, well, standard situations. Say you live with your spouse, your 2.1 kids, and a dog. Any auto policy will cover you, your spouse, and the kids who are of driving age. And the dog can come along for the ride, as long as he’s not behind the wheel.

But real life can be so much messier. Your kids might reside with your ex. You might share a car with a boyfriend who doesn’t live with you. Or you might let your elderly neighbor borrow your car once weekly to buy groceries. And those situations, involving drivers split across different households, may prompt you to ask this question: Can I add someone to my car insurance that doesn’t live with me? 

How to extend your auto coverage to drivers who don’t live with you  

 The answer is often yes, you can extend your auto coverage to someone who doesn’t live with you. There are three ways to do this:  

1. Add the driver to your policy as a listed driver. This is the right choice when the other driver uses your car regularly. Some insurers will allow you to list drivers who don’t live with you, and others do not. 

2. Add the driver to your policy as an “occasional” driver. Again, some insurers allow for this. Each insurer will have guidelines that define what occasional means. 

3. Give the driver permission to use your car once in a while. Your auto policy may have a “permissive use” feature that covers drivers who borrow your car infrequently.

Why you’d want to add someone to your policy  

 Before we dive into the differences across listed drivers, occasional drivers, and permissive use, let’s touch base on why you need coverage when someone else drives your car. You may have heard the phrase, “Insurance follows the car.” This means the car’s owner — not the driver — is typically liable for any damage caused by that car.  

If a driver who’s not on your policy has an accident while driving your car, there’s a chance your insurer will deny coverage — particularly if the insurer can prove this person is using your car regularly. Then, you’d be stuck paying out of your pocket to cover any repair costs and medical expenses related to the accident. Ultimately, it’s much cheaper to add a driver to your policy, than it would be to absorb the costs of an accident.

Listed drivers 

Someone who regularly drives your car should be on your policy as a listed driver. Normally, listed drivers live with you. But there are some common situations when you need coverage for a driver who lives somewhere else:

1. Your child, of driving age, doesn’t live with you full-time

2. You employ a childcare worker who transports your kids

3. You employ a senior care worker who drives your parents 

4. A relative is staying with you temporarily 

Most insurance carriers can accommodate these scenarios. You’ll need to provide the other driver’s license and contact information and let the insurance carrier know which car that driver will use. Your premiums will increase. Hopefully, the other driver has a good driving record, as that will limit the added expense.  

Occasional drivers 

Generally, an occasional driver is someone who uses your car regularly, but not daily.¹ Some insurers specify that occasional drivers must use the car less than 25% of the time. If your insurer allows for occasional drivers, get the details on what “occasional” actually means for your policy. If you can comply with the rules, adding an occasional driver is cost-effective. That driver will be covered, but it won’t be as expensive as adding another full-time driver to your policy. 

Permissive use 

A driver who uses your car infrequently — say, only a few times a year — doesn’t have to be added to a policy that allows for permissive use. Permissive use means you’ve given that person explicit permission to drive your car. Always read the fine print of your own policy to understand your insurer’s definition of permissive use. Smaller carriers may have more specific requirements, or may not honor permissive use coverage at all. If your policy does honor permissive use coverage, that usually means your comprehensive, collision, and liability coverage will extend to other drivers.  

• Comprehensive coverage: Comprehensive coverage protects you from vehicle damage that isn’t caused by an accident. Things like hail damage, fire damage, theft, or vandalism are covered by comprehensive. If a friend borrows your car and gets stuck in a hailstorm, you should be able to file a claim for those hail nicks.² 

• Collision coverage: Collision insurance addresses damage to your car that’s caused by an accident. That includes accidents involving another car or another object, like a mailbox. You can also use your collision insurance to pay for damage resulting from a single-car accident — such as rolling over after taking a turn too fast.³ It’s not advisable to let an aggressive driver borrow your car, but your collision coverage should be in force if you do.

• Liability coverage: If you or someone driving your car causes an accident, liability insurance pays the other person’s vehicle repair costs and medical expenses, up to the limits specified in your coverage. Note that your liability coverage also covers you when you drive someone else’s car. As well, if a driver who’s insured by another policy drives your car, that driver’s liability coverage could be used to pay for damages caused in an at-fault accident. However, liability only covers the other party’s damages. You’d still have to fix your own car. 

Listed vs. occasional vs. permissive

Here are four scenarios to illustrate the strategies you can use to extend your coverage to another driver:

• Your neighbor borrows your car, with your permission, every other Wednesday for bingo night. Because this happens regularly, your neighbor won’t be covered by your policy’s permissive use feature. Consider adding your neighbor as an occasional driver.

• You let your cousin use your car for two days while his car is being repaired. Your cousin should be covered by your insurance under permissive use since this is a one-time arrangement. 

• Your mom drives your car five or six times a year, to run random errands. Your insurance should extend to your mom under permissive use since she drives the car only a few times a year. 

• Your sister who doesn’t live with you uses your car daily to take her kids to daycare. Her activity is too regular to be considered occasional. For the same reason, she wouldn’t be covered by permissive use — even though she has your permission. Ask your insurance carrier about adding your sister as a listed driver on the policy.

Can I add someone to my auto policy that doesn’t live with me?

 At the end of the day, the answer to this question depends on your insurance carrier and how often the other driver uses your car. In some cases, your current carrier won’t allow you to add a non-household driver. In that case, you can:

• Shop around to find a carrier with coverage that suits your situation, or

• Stop letting the other driver use your car. 

Ignoring the issue and hoping for the best isn’t an option. That leaves you exposed to any damage caused by the other driver, and that’s not a risk worth taking.