Having your adult children at home means there could be consequences for your car insurance. You have the option of including them in your plans as periodic drivers or removing them, but what should you do?
What are Primary and Periodic Drivers?
The primary driver is the person who uses the vehicle the most, whether it is owned or rented. Insurance prices are calculated based on your driving background, which can consist of an accident you’ve had or a ticket you’ve received.
A regular driver (sometimes called an auxiliary driver) is usually someone in your household who uses a vehicle regularly but who at least owns one. This will most likely be your partner or companion. It could also be other people who own the vehicle, consisting of mother and father, children, or friends.
Anyone who regularly uses your vehicle should be included in your plan as a regular driver.
Fee Including Periodic Driver
Including a regular driver for your insurance coverage will imply that you will often have to pay a higher rate. There will be a diminishing increase if the driver is over 25 years old, has more than 5 years experience, and does not have multiple loss or accident factors in their driving record. Since each company has its own rules and prices, it’s a good idea to check with your insurance provider to see how much your rates will increase.
Both Ontario and Alberta have completed licensing systems for drivers of all ages. When a permanent driver is in the first phase of a completed program and requires a licensed driver with them, you do not need to include them for your insurance coverage. But if they get into an accident, it could cause your costs to go up.
Once your child is enabled to have their own — even if they’re adults — they should be included in your plan. There may be a substantial increase in costs if the driver is young (16 to 24 years old), does not have much driving experience or background as a guaranteed driver, or has many disadvantage factors. Including a high-risk driver can cost you a lot more money each month.
If your adult child has their own car and insurance, they will still need to be included in your plan. However, it is unlikely that the costs will go up because you are both covered under separate insurance coverage.
Eliminate Some Drivers
In Ontario and Alberta, you must include all drivers in your household for your plan. Costs can pile up quickly, especially if you have a variety of unskilled drivers at home.
Fortunately, there may be a way about this. For Ontarians, there is an Ontario Change of Plan Form (OPCF) that you can request if you wish to omit a driver from our package: the Lost Driver OPCF 28A form must be authorized by you and the omitted driver.
By signing the change form, you and the omitted driver both agree to the exception of some very limited liability coverage. The plan will provide no coverage for loss or damage caused by a omitted driver, and neither the owner of the vehicle nor the omitted driver may be directly liable for any damage or injury instigated by a omitted driver. Due to the situation, you should make sure your child does not own a vehicle.
For Alberta residents, there are a pair of Standard Recommendation Forms (SEF) that you can use to eliminate a driver: SEF 8A – Compensation of property for the procedure by the called individual, and SEF 28 – Decreased coverage in respect of the procedure by the called individual. These 2 forms are used in conjunction with each other.
By signing the SEF 8A form, the policyholder agrees to pay the insurance provider a certain amount or the actual amount of driver-initiated trouble that is eliminated in the event of an accident. Form SEF 28 reduces liability coverage to $200,000 if the missing driver uses the vehicle. Also, no physical damage is protected.
What About Including Other Drivers?
There are situations when you might lend your car to a relative or friend. In most situations, you will not need to include a visitor driver in your plans. However, you must ensure that they meet the following criteria:
- The person using the vehicle has a license and is allowed to own one in your district or area.
- You agree verbally or in writing that another driver may use your vehicle.
- You don’t lend your vehicle to someone who uses it regularly (for example, once a week to run errands).
If the person you give your car to is in an accident, they will be covered under your insurance as long as they meet the criteria stated above, and are using the vehicle for individual use, not industrial purposes (such as driving for Uber). Unfortunately, whatever happens when your friend owns your vehicle will impact your car insurance premium and not his. If the driver is associated with an unintentional accident, your premium may increase.