Your child has just obtained his or her probationary driver’s license and would like to borrow your car? Before allowing him or her to take the wheel, however, make sure that you are avoiding unnecessary risks. Indeed, your first reflex might be to omit telling your insurer about the addition of a new driver to avoid seeing your premiums go up. Assurances Multi-Risques advises you to immediately inform your insurance broker or company of this fact in order to avoid problems in case you have to make a claim.
What are the possible consequences of omitting to declare your child as a driver on your car insurance contract?
If your insurer is able to prove that you have made a false declaration, he may deny you coverage if you make a claim. In most cases, however, the insurer will likely follow section 2411 of the Quebec Civil Code which states that the insurer has the obligation of offering you the coverage you have paid for versus the one should have had if you had informed him that your child was the occasional or main driver of the car. This article, by the way, applies to all types of insurance contracts.
Let us therefore suppose that your current car insurance premium was $500. If you had added your child as an occasional driver, your premium would have been set a $1,000. In the following pretend case, the insurer will offer you coverage according to the premium you have paid versus the one you should have paid, taking into the account the damages claimed.
Here is a simple calculation illustrating this case:
Premium paid: $500
Premium you should have paid the insurer: $1,000
$500 / $1,000 X Loss ($20,000) = $10,000 – deductibles
As an insurance broker firm, Assurances Multi-Risques wants you to understand the possible consequences of omitting to declare a new driver to your car insurer. By forgetting or voluntarily avoiding to declare your child as an occasional or main driver of your car, you would have to shoulder a $10,000 loss according to the example given above. We are quite certain that you would not want to take such a financial risk.
Here are a few tips on how to avoid a substantial premium increase when you add your child to your car insurance policy:
- Contact an insurance broker to help you find an insurer who offers adequate coverage for young drivers;
- Increase your deductibles;
- Find an insurer who relies on telematics to evaluate the driver’s behaviour
- Lend your oldest vehicle to your child and have the insurance bar your child from using your newest vehicle.
In conclusion, contact your insurer as soon as your child gets his or her driver’s license. By doing so, you will gain peace of mind for both you and your child.