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Consumer Info Questions

YOU ASKED US…

Insurance-Canada.ca has been responding to consumer questions for the past six years. "You Asked Us ..." features the answers to some of your most frequently asked questions.

The Question:

Q: My husband and I own three cars. My son is only an occasional driver, but the insurance company wants to rate him as a full driver and charge a much higher premium, even though the cars are registered in my husband's and my name. Is this allowed?

A: Yes, it is allowed, and is common practice among insurers. And while it may seem like a money grab, there is some logic behind the practice. The thinking goes that, if there are three cars and three drivers, each driver must be rated as a principal driver. Since your son, in theory at least, has access to a car at all times, he cannot be rated as an occasional driver. Even though you may control your son's access to the car, if insurance companies did not take this position, sons and daughters everywhere would register their cars in the name of their parents and then claim to be occasional drivers. They'd save money on their insurance, but everyone else would have to pay more to subsidize their higher accident rate.

If you are a long-term client with a good claims record, you may be able to convince your insurer to reconsider its position, but don't count on it.

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The above is intended as general information only, and does not constitute legal advice. Be sure to check with your insurance representative regarding your specific situation.