My auto insurance provider charges me for occasional drivers – my wife and my mid-20s son who lives with us – despite the fact that they both have their own cars and insurance under different providers than mine. Is there an Ontario insurance industry standard on occasional drivers and when the premiums can be charged? If my son never moves out, I may still be paying this premium for the rest of my life! – V.P.
Any driver who lives under the same roof is automatically considered an occasional driver – unless you exclude them from your policy, says the Insurance Bureau of Canada.
"When you apply for insurance in Ontario, the application asks who the drivers in the household are," says Pete Karageorgos, manager, consumer and industry relations for the IBC. "The insurer wants to underwrite the household's risk, so they rate the car on the likelihood of another driver using it."
So, the insurance company assumes that the other drivers in the house will drive your car at some point – even if they have their own vehicles – and so they charge you extra, Karageorgos says. "Even if those drivers don't normally drive the car, it only takes one time to get into a collision."
There's a way around paying for occasional drivers – fill out Ontario's excluded driver endorsement form and exclude your son from your policy. He will have to sign too, agreeing that he won't be covered for your vehicle. You can do the same for your wife.
You won't have to pay for the excluded driver, but if that driver ever does take your car out, he (and your car) won't have insurance coverage. If there was an accident, he could be sued.
If everybody in the house switched to the same insurance company, you'd likely still have to pay for occasional drivers, but you might save some money if that insurance company offers group discounts, Karageorgos says.
And what about lending your car to a neighbour, your buddy or your sister-in-law visiting from Moosejaw?
Anyone you lend your car to will be covered automatically under an insurance policy, as long as they have a valid driver's license. But, if they're in an accident while driving your car and they're at fault, your rates will go up.
"As a general rule of thumb, if you're loaning out your vehicle, you're also loaning out your insurance record," Karageorgos says.
It only works for people who don't live with you – so, if your son moved out, he could borrow your car occasionally without you having to pay.