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Auto Insurance: Why You Should Make It a Household Term

“Can I take the car tonight?”

It’s one of those questions that virtually all parents anticipate, and that most ultimately will hear—time and again.

The thought of your son or daughter behind the wheel of a vehicle may stir a mix of emotions, from anxiety and fear to excitement and relief. Although the nuances of auto insurance may not be your top considerations, it’s important to place them high on the list. That’s because, among other reasons, your child needs more than your permission and keys in order to legally drive your car. Here in the Bay State, all relatives who drive and live in your household must be included on your vehicle’s insurance policy.

End of story? As is often the case with questions of law and policy, the answer is “it depends.” Here we provide some clarification on Massachusetts’ coverage requirements, and why legal factors aren’t the only ones to ponder.

Congratulations! It’s a driver

If you’re married, chances are you and your spouse have already listed each other on your respective vehicles’ insurance policies. But as soon as your child earns his or her license (provided he or she is living with you), you’ve got a new driver in your household. In the world of auto insurance coverage, “household” is a major operative term. Massachusetts law gives equal consideration to all licensed drivers in a household, adults and minors alike.

Who else does your house hold?

While parents and their teenaged child(ren) are the licensed drivers in many American households, this certainly isn’t the only household scenario. You may share a home with other relatives (nieces, nephews, elderly parents, adult siblings), a partner, friends, or even another family. Household members include all people living together in a home.

According to the Massachusetts Attorney General’s web site, auto policyholders must list all household members who are licensed drivers and related to them (by blood, marriage, or adoption), even if those members carry their own auto policy. However, the state further recommends listing any other household member who might occasionally drive your vehicle. This last piece is an important one, especially given our next clarification.

Customary vs. deferred operators

Many families designate a particular vehicle as the one the teenaged driver(s) may use. If this is your family’s situation, you may have responsibly added your son to that vehicle’s policy even as he was studying for his learner’s permit. Or, maybe the day your stepdaughter got her license was the day she officially inherited your brother’s old sedan, for which you purchased an insurance policy in her name and yours. Although in either case there’s only one “household” vehicle that your teen drives, that teen is a legal relative. As such, the parents’ (and/or stepparents’) auto policies must include him or her.

What about the non-relatives mentioned above, those household members who might possibly use your car? Well, the state mandates that in addition to relatives, you add other “customary” (i.e., frequent or regular) household operators, and you may consider other licensed drivers in the home (who have their own insurance policies) as “deferred” operators. Usually you can list deferred operators at no additional cost.

Needless to say, this can get both tricky and sticky. Operator labels are loosely defined, and the state does not regulate insurance companies’ own specific policies. Some insurers don’t allow “deferred” status, and some won’t honor an accident claim if all customary operators are not listed on the vehicle’s policy (regardless of who was driving).

The take-home? Let safety rule

Consider this: Offhand, you might say your husband almost never drives your car. Still, regardless of legalities, it makes sense to share each other’s auto policies. Why not view all household drivers the same way?

If for no other reason than safety’s sake in an unpredictable world, ensuring coverage for all qualified drivers on all vehicles is usually the best choice. Experts at The Dowd Agencies can help. When it comes to protecting your family while staying conscious of your finances, we’ve got the personalized household hints you need.