Roommates and Your Car Insurance

Whether you live with your relatives, friends, or significant other, car insurance companies expect that everyone in the household will have access to all the vehicles parked at the residence. Auto insurance providers recognize that this situation exposes them to additional risks and will adjust your rates accordingly.

Do You Need to Add a Roommate to Your Policy?

Your carrier will probably insist you add all the other licensed drivers in the household you share to your auto policy. This standard industry practice has existed for decades. Failure to list all drivers residing in your household could result in cancellation of your policy. In some instances, failing to list someone who frequently drives your car could be considered insurance fraud because coverage often follows the vehicle, not the driver.

If someone has an accident while driving your car, your insurance policy is applied first. If the driver is not listed on the policy, the insurance company may reduce the level of coverage or refuse to pay the claim. In this case, you could be held personally responsible for paying any financial costs resulting from with the accident.

Roommates and Your Insurance Rates

If you live with someone else, you can combine your auto insurance even if you're not married. Roommates with their own vehicles can add one another to each respective car insurance policy. This may qualify you for multiple-car discounts. If there's only one car at the residence, the primary owner should add the roommate(s) to his or her policy as a non-owner.

Adding drivers who are inexperienced or have a checkered driving history will likely cause your car insurance rates to go up. If the additional driver is older and has a better driving record than yours, the premiums may stay the same or drop slightly. Remember, if someone listed on your policy is involved in an accident, you will be responsible for paying the deductible.

How to Exclude a Driver

Car insurance companies require you to stipulate other household members will not operate your vehicle if you want to exclude your roommate(s) from your policy. You can exclude a roommate by intentionally listing them as a non-driver on your policy.

If you do not specifically list a roommate as a non-driver, your auto insurance company may charge higher rates because they assume you'll allow the individual to use your car. To protect your wallet, you should consider excluding someone if he or she has a poor driving record. The rules covering how to exclude a driver vary by state, so check with your insurance company.

Removing Someone from Your Policy

A combined policy is effective as long as the covered individuals reside in the same home. If your housing situation changes, notify your auto insurance company immediately.

When only one car is involved, removing a second driver from your car insurance policy is fairly straightforward. On the other hand, split policies with multiple vehicles may cause your insurance rates to increase because you'll no longer be eligible for a multi-car discount. After moving, your premium could also increase if your roommate's low-risk rating was the reason your policy received a safe driver discount.

Whether you want to add a driver to a single policy or combine two separate policies, you should shop around for the best rates. If you're insured by one company and your roommate uses a different carrier, ask each insurer to provide a quote for a new combined policy. You can also request quotes from other car insurance companies so you get the best rate possible.