Does insurance get affected when: lending your car?

BRITISH COLUMBIA

How it works?
Your auto insurance policy should cover damage to your vehicle when someone else drives it, however, you’re required by the Insurance Corporation of British Columbia (ICBC) to list anyone else who drives your vehicle on your insurance policy. In September 2019, car insurance in B.C. moved to a more driver- based model, meaning each driver’s experience and accident history plays a bigger role in determining premiums.

What you should know?
1. Under B.C.’s driver-based insurance model, at-fault crashes will affect the record of the driver who caused the crash, not yours as the owner of the vehicle. However, if the driver who caused the crash with your car isn’t listed as an additional driver on your insurance policy, you’ll have to pay a one-time additional premium.
2. It’s best to list everyone who drives your car on your auto policy – you can add and remove listed drivers any time by simply visiting an ICBC broker office. Knowing who drives your car helps the ICBC assess the risk and ensure the right person is held accountable should there be an at-fault crash.
3. For added protection from a one-time financial penalty in case an occasional driver that’s not listed on your policy crash your car, you can add Unlisted Driver Protection coverage onto your auto policy. Occasional use is seen as up to 12 days a year per driver, in any car owned or leased by its registered owner, lessee or principal driver.

AlBERTA
 
How it works?
Listing an additional insured on an auto policy in Alberta can work in a number of ways, however it’s most commonly done through spousal or co-signer relationships. To be listed as an additional insured, the insured must have ownership of one or more vehicles on a policy, so in the event of a claim the pay- out is made out to all owners or individuals who hold a financial interest in the vehicle.

1. Co-titled Vehicles – Seen as ‘additional insured’ if the two people on the title aren’t married or listed as named insureds together. Example: a father-daughter relationship, where the father co-signed for his daughter to help her buy the car. Both share a financial interest in the vehicle, so both need to be listed as named insureds. A claim pay-out would be made out in both names.
2. Leased Vehicles – The leased company should be listed as both a loss payee and additional insured, as the leasing company is both the lender and owner with financial interest in the car.

What you should know?
Adding an additional insured on your auto policy can impact you in several ways, including:

1. Credit Score – Your credit score, and that of the additional insured named on your policy, could affect your monthly payments possibly being declined or losing your credit discount.
2. Tickets & Claims – When you add an additional insured, their driving behavior history and claims history is taken into account, which affects your insurance premium plan and coverages available to you. If they have had several accidents or convictions, you may find it very difficult to own your financed vehicle.
3. Split Ratings – Some insurance companies use split ratings when it comes to having two named insureds with different driving record histories. For example, if you have a 9-star driving record and the additional insured only has a 4-star driving record, your driving record rating will go down to either a 6-star or 5-star. This can impact both your premium and coverage when it comes to accident rating waiver endorsement. 

ONTARIO

How it works?
Under its different sections, the Ontario Automobile Policy provides varying degrees of protection, depending on the type of claim, for interested parties such as a spouse, other dependents or passengers. Under the liability section, for example, the car owner as well as anyone who has the owner’s consent to operate it, is afforded coverage. However, under the Accident Benefit section, any person injured or killed in an auto accident, whether related to the policyholder or not, is also covered.

What you should know?
1. When you give permission to someone to operate your vehicle, you also agree to accept the responsibility of their actions as it relates to the use of your vehicle. This could seriously impact your insurance coverage, so only lend your car to someone you’re confident is a responsible driver.
2. If someone uses your car on a semi-regular basis, it’s best to add them as a “listed driver” to ensure there’s no coverage gap and avoid a potential dispute with your insurer.

NEWFOUNDLAND & LABRADOR

How it works?
An additional insured is added if the person is a joint owner of the vehicle, typically this would be a spouse or common law partner or if you buy a vehicle with your child and you are both registered owners.

What you should know?
Some insurance carriers require children in the same household who are joint-owners of the car to be set up with a separate policy, others don’t. Your broker can explain how your carrier handles additional insureds on your policy.