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Roommates: They’ll Eat Your Food and Affect Your Car Insurance Quotes

May 20, 2015
Auto Insurance, Insurance
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When interviewing potential roommates, it’s common to ask about ability to afford the rent and proclivity for partying. But you also might want to consider how sharing your home can impact your car insurance quote. If your roommates are going to be using your vehicle, additional driver insurance can come into play.

Drivers and your auto policy

Insurance companies base rates on factors that have been shown to impact the likelihood and cost of an accident or other claim, including your car model, location, miles driven, and the ages and driving record of people who drive the car.

When it comes to insuring drivers, it’s not just about who you want or expect to drive your car.

“We ask that you list all drivers in your household who have access to your vehicle, including your spouse, relatives, licensed children, and roommates,” insurer Esurance notes on its website. It adds you might also need to add other friends who frequently drive your car.

Why you should list other drivers

Remember that insurance follows the vehicle, not the driver. So if someone has an accident while driving your car, your insurance would apply first.

But your insurance company may reduce coverage for a driver not listed on your policy in states that allow this, Esurance adds. “In other words, if you don’t list your buddy who borrows your car now and then and an accident occurs, you could be responsible for paying any damages that exceed the reduced coverage.”

Is someone borrows your car without your permission, that person’s insurance generally would apply before yours, although it usually must be “clear that you expressly deny permission,” Esurance says.

How other drivers will impact your rates

Adding a driver who is young or has a checkered driving history could raise your rates, Esurance says. “On the other hand, if the other driver wins the Best Family Driver Award year in and year out, your premium likely won’t rise. In fact, with the additional (good) driver, your rates could even go down.”

An additional way other drivers can impact your rates, of course, is by causing an accident while driving your car, resulting in a claim on your policy. Or, imagine they back into a pole and you need to make a collision claim for the damage. Guess who’s responsible for the deductible? You.

A final caution

Finally, don’t lend your roommate your car for her job delivering pizzas unless you have coverage for business use.

As Progressive notes: “Personal auto policies typically don’t cover anyone for conducting business with their vehicles.”

The upshot is that driving record may be another factor to consider when looking for a roommate, because it could raise, or even lower, your auto insurance quote.

Aubrey Cohen is a staff writer covering insurance and investing for NerdWallet. Follow him on Twitter @aubreycohen and on Google+.

Image via iStock.