Reviewed by Daniel Mirkovic
Updated October 18, 2024 | Published September 9, 2024
It’s not uncommon to want to let someone borrow your car every now and then. But when should you disclose them to your insurance provider, and are there any risks if you don’t?
In this article, we’ll explain when and why an insurer might want to know about people who use your car.
When it comes to listing a driver on a car insurance policy, there are two main categories they may fall under:
As a primary driver, you don’t necessarily need to list every person you lend your car to. For example, if someone borrows your car to run some errands once or twice a year, there isn’t really a need to include them in your insurance. But if they’re doing so often, your insurer might want to know about the arrangement.
As a rule of thumb, you should inform your insurer about anyone who uses your car regularly (or on a frequent and recurring basis). For example, if you’re lending your car to a neighbor every Friday to help out with their errands, there’s a good chance your insurer will want to know about them.
Some insurers may define ‘regular use’ differently than others, which means the scenarios in which you’d have to extend your car insurance to someone else can vary. Typically, an insurer will consider how the person is going to be using your car along with some other factors, like their age and driving history. If that person is going to be using your car more than a handful of times a year, there’s a good chance your insurer will ask you to list them as an occasional driver.
As for who you should list as an occasional driver, it’ll typically be your household members who are licensed to drive and anyone else with regular access to your vehicle. But, before anyone can borrow your car, they’ll need to have your permission first.
Drivers you’ll need to list could include:
If you’re unsure about who to add to your car insurance policy, it’s best to speak with your insurance provider.
When an insurer asks about other drivers of your car, they’re trying to get a complete picture of who drives the insured vehicle and the extent of risk they are insuring. With this information, they can assess a premium that accurately reflects the risk involved with offering your car insurance policy.
Every driver poses a different risk level to the insurer based on their driving habits and experience. A driver on a learner’s license, for example, would generally be considered a higher risk than someone with more years behind the wheel. Similarly, someone with a poor driving record theoretically poses a greater risk to the insurer than a driver with a crash-free history.
Knowing who uses your car helps insurers ensure that the price of your policy reflects the coverage needed for everyone insured by your policy, including occasional drivers. So, before you trust someone to use your vehicle, make sure you’re aware of the risks they might bring.
That depends on how risky the driver you’re listing is. When an insurer evaluates an occasional driver’s risk profile, they’ll use the same factors they used to calculate your premium. That includes things like the person’s age, license type, and driving record.
If the occasional driver has a less favorable driving record than yours, your insurer might bump up your rate when you list them on your policy. This could add anywhere from $500 to $1,000 per year, but the exact amount will vary based on the driver’s risk level. 1 Conversely, an occasional driver with a clean driving record might not raise your rates much.
In most cases, these premium adjustments take effect immediately instead of at your next renewal.
There are a few exceptions when listing a regular driver doesn’t come with an extra charge — for instance, if they already have insurance elsewhere. If a borrower has their own car insurance policy, your insurer may not factor them in pricing your policy.
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If you don’t tell your insurance company about a regular driver of your car, there may be consequences.
For instance, if an undisclosed regular driver crashes your car, your insurer will want to investigate who that driver is and how long they’ve been driving it. Not only could this investigation take time, but it could also delay your claim settlement — the longer the investigation, the longer it could take to receive a payout.
Some individuals attempt to hide regular drivers intentionally to avoid paying higher premiums. This is called material misrepresentation and is a form of insurance fraud. If your insurer finds out you didn’t disclose a driver for this reason, they might deny your claim or cancel your policy altogether. It also goes on your insurance record, which could affect your eligibility and future insurance rates with other providers.
The rules about listing regular drivers are different between provinces with government-run insurance and those with private car insurance.
In provinces with private systems, like Ontario, Alberta, and Quebec, when a driver borrows your car, they also borrow your insurance. If they drive your car regularly, they must be listed as an occasional driver. So, if an occasional or unlisted driver crashes your car, the damage would be covered by the car owner’s policy — the same as if you were driving it yourself.
Since you weren’t driving, the accident won’t go on your driving history. But, since it’s your car, it would go on your insurance history. Insurance history and driving history are two different things, and they both affect your insurance premiums. Thus, an occasional or unlisted driver being responsible for an accident in your car could still affect your insurance premiums.
In provinces like British Columbia, Saskatchewan, and Manitoba that use government-run insurance, if you lend your car to someone and they cause an accident, the crash will affect their insurance record and rates, not yours. As for when you should list them on your policy, it can vary by province:
If you’re not sure whether to add someone to your policy, it’s always best to check with your insurance provider. They can give you the most accurate information based on your specific situation and province.
Yes, you can typically remove an occasional driver from your car insurance policy if they no longer use your vehicle. For example, when someone in your household no longer lives with you, you can typically have them removed as a listed driver on your policy (though with some insurers, you may need to prove that they’ve moved and won’t have access to your car).
In a scenario where a listed driver dies, the insurer may request a copy of their death certificate before making the change.
Although they might sound like the same thing, removing and excluding a driver can mean different things to an insurance company. Normally, you can remove a driver from your policy if they move out of your household or no longer drive your car regularly. However, they’d still have coverage under your policy if they drive it occasionally with your permission.
Excluding a driver, on the other hand, is the more extreme step (typically done by signing an exclusion form). In Ontario, policyholders can add the OPCF 28A: Excluded Driver endorsement. This endorsement prohibits the excluded driver from driving the insured vehicle and removes them from your insurance policy entirely. An excluded driver has no coverage whatsoever under your policy. So, if they cause an accident in your car (with or without your permission), they’ll be entirely responsible for those damages.
You can list excluded drivers in some other provinces too, but the process may be slightly different.For example, in BC, you can remove a listed driver at any time through one of ICBC’s Autoplan broker offices. 5
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About the expert: Daniel Mirkovic
A co-founder of Square One with 25 years of experience in the insurance industry, Daniel was previously vice president of the insurance and travel divisions at the British Columbia Automobile Association. Daniel has a bachelor of commerce and a Master of Business Administration (MBA) from the Sauder School of Business at the University of British Columbia. He holds a Canadian Accredited Insurance Broker (CAIB) designation and a general insurance license level 3 in BC, Alberta, Saskatchewan, Manitoba and Ontario.
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