It's easy to forget that your auto insurance policy is a contract. However, besides paying your premium on time, in order to keep your car insurance rates down you -- and your policy intact - you must follow your car insurance company’s rules.

But how can you abide by the rules when you don’t even know what they are? Policies are long and the fine print and terms may confuse you. Don't worry, we have your back.

Here are 10 common scenarios that readers often ask our experts about. If any of these hit close to home, quickly fix the issue before you get in a pickle.

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1. You haven’t added a newly licensed teen to your car insurance policy.

No one wants to raise their hand and offer to pay more for car insurance. But insurers are permitted to consider all household residents when they price a policy, including a licensed teen. Withholding information about your teen driver from your car insurance company is a big no-no.

Horrible car insurance mistakesAnd don't think that auto insurers won't know about your teen -- they have ways of finding out. A car insurance company can pull reports that identify “hidden” household members. One such report from LexisNexis looks for “undisclosed” newly licensed youthful drivers between ages 15 and 25.  If your insurer finds out about your licensed teenager this way, it can revise your premiums to include the young driver, or decide it doesn’t want your business anymore.

If your insurer doesn’t find out about your teen until there is an accident, it still might cover the incident. That would be a lucky outcome, but you’d likely owe back premiums based on when your teen driver was licensed -- so may have to pay the insurer a lot at once just to have the accident covered and teen insured. Or, your auto insurance company may say it’s not covering the teenager and is dropping your policy because of your failure to inform it. They call this misrepresentation and can be considered insurance fraud.

2. You let your adult child take your car with her when she moved to another state.

Sure, it’s so much easier to put off a call to your agent and let your child move away with a family car. But when your car is being driven and garaged in a new area, the risks you pose as a customer have changed. Car insurance companies expect to be informed about these changes. If your daughter were in an accident, your insurer could say you concealed vital information about the vehicle’s location, deny your claim and cancel the policy.

If you want to do things the right way, add the child’s name to the car’s title.  Then your child can buy insurance for  the car in her own name and using her new address. This will also allow your child to register the car in her new state, which most states require. 

3. You sold your car to your son but still carry the insurance on it.

Uh oh. In general, you can’t carry insurance on a car in which you don’t have an “insurable interest.”  Typically those with an insurable interest are the car’s owners, lienholders and co-signers – meaning those who would be affected financially if something happens to the car.

Since you are no longer the car’s owner, it’s time for the new owner -- your child -- to buy car insurance for the vehicle.  If he’s still a minor, you may have to be on the policy with him.  Minors typically must have a parent or guardian involved in the auto insurance contract.

You could face problems submitting a claim if you have failed to tell your insurance company about the ownership change. Or worse, the car insurance company could say you hid the change as a scheme to get lower car insurance rates, which would qualify as insurance fraud and a reason for it to deny claims and cancel the policy. 

4. You want to finance and insure a car for a relative who lives out of state.

First off, auto finance companies want evidence that the car loan is in the same name as the insurance policy. Since you’re not the primary driver of the car, nor is the car at your residence, it is difficult, if not impossible, for you to insure the car.

You should contact the finance company to see if it will allow your relative to be the “named insured” on a policy.  If it agrees, your relative has the hurdle of finding an insurance company in her state that will permit her to insure a car she doesn’t own.  If she can find such a company, then she still has to list you and the finance company on the insurance as owner and lienholder, respectively.

If you carry insurance on the car without telling your insurer about the situation and your relative wrecks the vehicle, it’s very likely the accident wouldn’t be covered.  Your car insurance company is likely to call you out for misrepresenting who was driving the car and where it was located, and cancel the policy. Also, remember each state has its own car insurance laws, so if you insure in your state while the car is driven and parked in another, the insurance policy would not match with the rules of the state its located in, another problem the insurer may have if they even thought of covering any type of accident.

5. You lend your car to a friend for a few months and don’t notify the insurance company.

Your car insurance policy typically will cover a friend who drives your car occasionally, but it’s a different story when you loan your car out for a long period. The car is now housed someplace other than your residence, and someone else is acting as the primary driver of the car -- both circumstances your car insurance company wants to know about.

If your insurance company’s rules allow, you may be permitted to add your friend as a driver to your auto policy, but most car insurance companies don’t want to add a person outside of the household.  If that is the case, your friend should consider insuring the car.  Some insurance companies will allow someone to insure a car that he doesn’t own, as long as the owner is listed on the policy.

If your friend crashes your car without the insurance company being aware and agreeing to insure the friend, it can deny claims because you concealed pertinent information about the “real” driver and vehicle location. That can leave you and your friend on the hook for damages he caused.

6. You sold your car and the buyer is making payments but you’re still carrying the title and insurance.

Don’t keep your name and insurance on a car that another person possesses!

First, as the owner – because your name is still on the title -- you have vicarious liability for the actions of the person driving the car that you “sold.” 

Second, you’re paying for insurance but any claims might not be covered. Your car insurance policy normally covers cars and drivers of your household, not others.

If you’re in this situation, you should sign the title over to the new party. He can easily get insurance once he registers the car -- and you will no longer be held responsible for his actions. To protect your interest in the car, make certain you’re listed as the lienholder on the car’s title and auto insurance policy.  That way you’ll be notified if he tries to sell the car, drop car insurance or makes a claim.

7. You’re delivering pizzas with your personal vehicle -- or driving for Uber or Lyft

Most personal auto insurance policies exclude coverage if you use the vehicle to deliver items, whether it’s pizza, newspapers, packages or medical supplies. Insurance companies see unsavory risk in delivery drivers because they are constantly on the road.

If you want to be paid to deliver items, you should change to a business-use or commercial car insurance policy. If you don’t and you get caught driving for deliveries, you’re on your own to compensate others for damages they sustained -- and the damages to your own vehicle.

If you've moved on from pizza delivery to driving people for money, make certain your insurer knows, and you have the right coverage. Car insurance companies exclude coverage for drivers engaged in commercial activities, be it delivering pizza or people to a destination. But because ridesharing has become such a big business, many auto insurance providers now offer policies or endorsements that rideshare drivers can purchase to add onto their normal policy that will cover them at least during Period 1 (driver is available for hire but yet to accept a bid) if not longer.  If you don't have this special coverage in place and are in an accident, don't look for your insurer to cover any claims for an accident that takes place during your rideshare adventures. You can look to the rideshare company's insurance, but it is contingent coverage, meaning you're supposed to have your own policy as primary for certain periods and thus may not cover any accident costs.  Also, if your insurer finds out you're a rideshare driver in your personal vehicle and failed to inform them, expect your policy to be canceled. 

8. You let an "excluded driver" drive your car.

Big mistake. When you put a named-driver exclusion on your policy it meant that the person listed is not covered under any circumstances and shouldn’t be driving your car.

So if that person gets behind the wheel of your car, even in an emergency, and causes an accident, you and the driver will be the ones to pay for any resulting injuries or property damage.

Hide your keys from any excluded driver in order to lower your risk of financial disaster. If the person was off the policy for a reason, teen turned in his license for instance, but circumstances change, such as the teen received a new license, then inform your car insurance company to take of the driver exclusion for that person and quote you the cost of adding him back on. Also, take time to comparison shop to make sure you are getting the best rates for your current situation.

9. You bought a new car weeks ago and haven’t told your insurer.

If you traded in a vehicle, then your car insurance policy likely extends the same exact coverage to your new car for a limited time. This means if you bought only liability on your old car, your new car would only have liability coverage. 

The deadline for informing your insurer about the new car varies by insurer, but is typically 14 to 30 days. Here’s more about extending coverage to new cars.

The bottom line is don’t bet on having automatic coverage; some car insurance companies don’t give you any. 

And if you’re adding a car rather than replacing one, you should buy coverage for it before driving it off the lot.

If you’re outside the insurer’s automatic coverage period, or there is no extended coverage on your new car, and you’re in an accident, your insurance company won’t help you. You’ll be paying out-of-pocket for damages you do to your own car or others.

10. You haven’t told your insurance company that your live-in girlfriend drives your car.

Insurance companies hate it when you “forget” to tell them about a driver who lives with you or regularly uses your car. Insurers can’t charge you correctly if they don’t know about all licensed household members, including a girlfriend or spouse. 

If you recently got married or moved in with someone, let the insurance company know immediately and have the person added to your policy as a driver. If you fail to do so, don’t be surprised if claims are denied if they cause an accident, or if you’re asked to pay back premiums based on the additional driver. 

If your car insurance company believes you were intentionally hiding the driver – say your girlfriend has a bad driving record -- then it may say you committed fraud by means of misrepresentation. That means your car insurance company can cancel your policy.

If it's time to shop for new auto insurance, especially important if you're making changes such as adding a driver to your policy, check out's annual list of the top-rated auto insurers.