Your auto insurance premium is partially determined by the drivers that are listed on the policy. While your insurer looks at a variety of factors when setting your rate, the drivers (and their driving record) that are listed on your policy will absolutely push your premium up or down.

The big question for many people is who exactly has to be listed on their policy and how that can impact their premium. While a fully licensed teen driver certainly needs to be listed, what about a teen with a learning permit, a parent living with you or a neighbor who borrows your truck to move.

Having sufficient car insurance gives you a front-line defense if an accident happens. Your auto insurance company becomes the primary payer for damages and injuries instead of you personally -- but only if you’re properly covered for the situation.

We thought it might be helpful to have a look at who needs to be listed on your car insurance policy and who you can leave off.

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Who should be listed on your insurance policy?

The answer to this question can vary depending on your insurance company but there are a few general guidelines you should consider. The best advice is to call your agent or insurance company directly if you are not sure if a person should be listed or not.

If you fail to list a driver that your insurer requires and they are responsible for an accident, you may end up with a denied claim, leaving you on the hook for all of the costs related to the accident. This is especially true if you leave a driver off of your policy in order to lower your premium (think teen drivers).

In general, the majority of insurance companies would expect the following people to be listed on your car insurance policy:

•  Licensed family members living in your household

• Unrelated licensed drivers living in your household (who do not have a policy of their own)

•  Anyone driving your vehicle on a regular basis that is not insured on another policy

As a general rule, everyone in your household that is licensed should be a listed driver or at the very least be known to your insurer.  If the party has their own insurance policy, that should be known by your insurer. If you leave anyone off, expect the insurance company to ask about them. Insurers obtain reports that list potentially undisclosed drivers, including newly licensed drivers and additional drivers.

While these are general guidelines, policies vary by insurance company so always check with your insurer if you have any doubts. Now let's have a look at some specific scenarios:

Teen with a permit

This is a difficult one, while some insurers don't require a teen with a driver's permit to be listed on the policy, others will. The best advice is to contact your insurer to see what they require and at what point you definitely need to list them as a driver.

Insurance for a newly licensed teenager

If you have a newly licensed teenager in the house you absolutely should have them on your insurance. Giving consent for your teen to get a license makes you legally responsible for the young driver. It is also your responsibility to contact your car insurance company and get your teenage driver properly covered under your auto insurance policy.

Do you have to add them to your auto insurance policy?

Newly licensed teenage driver

A newly licensed teenager

Yes.

Teen driver who doesn't live with you

A teen driver who doesn’t live with you

Yes.

A minor child who lives with you but has her own vehicle

A minor child who lives with you but has her own vehicle

Yes.

An adult child who lives with you but has his own vehicle

An adult child who lives with you but has his own vehicle

No.

A parent who lives with you but has his or her own car

A parent who lives with you but has his or her own car

No.

A parent who lives with you and drives your car

A parent who lives with you and drives your car

Yes.

Friends, relatives and others who borrow your car occasionally

Friends, relatives and others who borrow your car occasionally

No.

A caregiver who drives you everywhere

A caregiver who drives you everywhere

Yes.

Your premium will absolutely be headed up when Junior hits your premium, in fact, teen drivers can often double a car insurance premium. However, if you hide your teen driver from your insurance company they may not be covered, leaving you on the hook for any damage they cause. Other insurers may cover the claim but will charge you back premiums for the teen driver to the day they were licensed, either way you are getting a significant bill.

According to the American Academy of Pediatrics, the crash rate for 16-year-olds is almost nine times greater than the general population of drivers, this is particularly true for brand new drivers. CDC data shows that crash risk is particularly high during the first months of licensure. The 2017 National Household Travel Survey found that the crash rate per mile driven is 1.5 times higher for 16-year-olds than it is for 18-19-year-olds.

When a teen hits your policy, it is a good idea to review your liability limits and consider upping them. Liability coverage pays for injuries and property damage caused by drivers of your vehicle. The higher the limits, the better, because if the limits are exceeded you have to pay the remainder. Limits of 100/300/50 are a good start, limits of 250/500/100 are even better.

Liability minimum levels are set at the state level, but they are almost never high enough to cover an accident. If you are carrying the minimum liability limits, you should absolutely up your limits when a teen is added to your policy.

If you are putting your teen in a newer vehicle you should also be carrying collision insurance which will pay to repair your vehicle if it is damaged in an accident. This is an optional coverage but if you are not carrying collision coverage and your teen damages or destroys your vehicle, you will be picking up the tab for repairs or a new vehicle. Collision is a fairly affordable coverage and can be a financial lifesaver if your teen (or you) wreaks your vehicle.

Insurance for a teen driver who doesn't live with you

Divorce often leads to auto insurance complications but just because a teen driver has moved out of your home doesn't mean you can automatically drop him from your car insurance policy.

If your child stays with you on a regular basis and has access to your vehicles (even if you forbid the to drive them) they should be on your car insurance. This is true even if your teen lives with another parent who has car insurance because your auto insurance company assumes the teen will drive your car while at your house.

Car insurance always follow the car, not the driver so if your teen is in an accident in your vehicle, it will be your insurance that forks up, not your ex-spouses. As with any teen driver you should consider upping your liability limits and adding collision coverage if you are not currently carrying it. Collision coverage from your teen's other household won't extend to your vehicle.

Insurance for a child who lives with you but has his own vehicle

Regardless of whether it's a teenager who saved up for his own car or an adult child who boomeranged back home, it's your responsibility to inform your car insurance company about any licensed drivers living in your household.

Unless your child has their own insurance policy, they should be on your policy if they are living at home. While an adult child that is living at home temporarily may have their own policy, if your teen is under 18, they will have a difficult time getting coverage as they are not old enough to legally enter into a contract, and that includes insurance policies.

If they are determined to get their own policy you will most likely need to cosign, putting you on the hook either way. The best advice is to add any children living at home, regardless of whether they have their own car, onto your policy while they are under your roof.

You should also verify that any child living in your home with their own car is carrying the appropriate coverage limits. Teens and young adults may be tempted to carry the state minimums to keep their costs low, but this can be a huge mistake, for both them and you.

If your teen is living in your home and still considered a dependent you can be held legally responsibility, which means you will be cleaning up the financial mess if they are in a serious accident without enough insurance coverage.

If a child is living at home and has a car titled in their name and has their own insurance policy, you should not be responsible if they are involved in an accident. In most cases there is no need to put them on your policy.

Because insurance follows the car, if your teen or adult child does borrow your car on occasion, your insurance will be primary. For this reason, it's wise to carry high liability limits and buy collision coverage if you want your car covered by your policy. Your child's auto insurance policy won't extend to your car.

Insurance for a parent who lives with you

In most cases, a parent that lives with you should have their own car and their own insurance so there is no need to list them on yours. However, if they no longer have a car and use yours on a regular basis you would need to put them on your policy.

If you fail to add them to your policy and your parent wrecks your car, the claim could be denied. If they do pay the claim, you will most likely be charged back premiums from when your parent moved in with you.

As with teens, elderly drivers often pay a higher premium because statistics show they are involved in more accident and claims. If you're sharing your car with a senior driver, you should consider upping your liability limits. Keep collision and comprehensive on your vehicle if you want it covered in the event of an accident, theft, fire, animal collision or vandalism.

Insurance for random people who drive your car

The majority of standard car insurance policies allow you to lend your car to a neighbor, significant other, friend or relative who doesn't live with you without adding them to your policy as long as they are not using it on a regular basis.

However, if the person you lent the car to is involved in an accident, it will be your insurance policy that covers the damage. Putting a claim on your policy can absolutely raise your rates so be careful when lending out your vehicle.

It's always a good idea to talk to your car insurance agent before lending out your car to make certain your policy covers anyone you give permission to drive your vehicle (called permissive drivers). While most insurance policies are permissive driver policies there are some out there that restrict coverage to only drivers listed on the policy. If you have this type of policy, there is zero coverage for drivers not on your policy.

Even if you have a permissive policy, if you lend your car to someone who doesn't have a valid driver's license or is impaired (think drugs or alcohol) your insurance will most likely deny your claim. This will leave you responsible for all damages and any resulting lawsuits.

If your friend decides to use your car to earn money via delivery driving or being a rideshare driver there will most likely not be any coverage. A standard car insurance policy excludes coverage if you are using your vehicle for commercial purposes.

Before you hand over your keys to a friend or relative make sure they have a valid drivers license are not using your car in a commercial capacity.

Finally, remember that your car insurance will be the primary insurance when someone is driving your car, regardless of whether or not your friend has their own policy. Your insurance will cover the claim (up to your coverage limits) which means your rates could be headed up. If you are not carrying collision coverage it will be up to you (or hopefully your friend will step up) to fix or replace your vehicle.

Insurance for a caregiver

If you have retired from driving and have a friend or caregiver that drives you around on a regular basis you need to add them to your car insurance policy. You have vicarious liability for anyone who operates your vehicle with permission.

Inform your car insurance company that the caregiver regularly drives your vehicle, in most cases, they will require you to add this person to your policy as a listed driver. If you've lost or given up your license, you should request that the caregiver be listed as the primary driver on your policy. As the car owner, you still need to be the one to insure your car.

Excluding drivers

If you have concerns about your teen, adult child living at home or anyone else for that matter, borrowing your car, you can exclude them from your policy. You will need to contact your insurer to let them know which drivers are excluded.

Excluding a driver from your policy means that there is absolutely no coverage for these drivers, even if they take your car without your permission which means you will be paying for any damage if your teen goes joyriding.

Adding or removing a driver from your policy? It’s time to shop around

When you add or remove a driver or have any major life events, like getting married or divorced, it’s time to reevaluate your auto insurance needs. You may need to take off a car or driver, or add them on or raise liability limits due to adding a teen driver.  Making your policy is right for your current needs will give you the right protection levels.  If it's time to shop around for better rates for your situation, review the best car insurance companies to get started.