Each car insurance company uses its own risk assessment formula to determine policy rates. In addition, insurance companies include many variables such as your age, marital status, the car that you drive and the driving records of the other drivers on your policy. Keep in mind that each insurance company may weigh your driving factors differently.
How Other Household Drivers Affect Your Rates
The driving record of those you share a policy with can affect your rates in several ways. If one of the drivers on your policy has a poor driving record, then your insurance company may charge you more. A poor driving record may include traffic tickets, accidents and driving while intoxicated offenses.
Furthermore, some insurance companies deny coverage for individuals with excessively high risks, so if another driver on your policy has had serious trouble on the road, then you should consider removing him or her from your policy.
Insurance companies also base rates according to the experience level of all of the drivers on your policy. For instance, if you begin covering a teenage driver, then you should expect a rate increase. Multiple studies have shown that teenagers are at a higher risk of being involved in an accident than drivers in other age groups.
During the insurance application process, an agent will ask for details about your driving record and the history of the other policy’s drivers. The company requires the information to determine its risk level for drivers who have access to your vehicle. Even if your record is blemish-free, another motorist in your house with a less than stellar driving history can cause the insurance company to charge you more for a policy.
The reason for the higher rates is that the other driver has access to your vehicle. Also, one driving incident incurred by any driver on the policy can cause your rates to increase by 10 to 50 percent. When you share a car insurance policy with another driver who has a positive driving record, your rates will likely be lower as long as you share a similar driving history.
Rate Reducing Options
If your insurance rates are higher because of another driver on your policy, then you can request an exclusion of the other driver. Under a driver exclusion addendum, the insurance company does not have to cover the damage if the excluded driver causes an accident by driving your car. Keep in mind that you cannot request this provision if you share the car.
Many insurance companies offer discounts when you have multiple policies through them. For instance, if your car, home and life insurance coverage is through one company, then you are likely to receive a discount.
Shared Policy Benefits
In many situations, a shared policy is beneficial and frequently results in favorable auto insurance quotes. However, you do have options to reduce your rates if you’re sharing a policy with a driver that has a negative driving history. Be sure to shop around to locate the best car insurance rates.