QOTD: Do I Have To Share My Roommate’s Info To Get Car Insurance?

Question: My car insurance is asking who lives with me and for all their information and they won’t quote me unless I tell them. Do I have to give this information?

Answer: Try as we may to schedule, plan and prepare for our days, the fact is that life is completely unpredictable. You never know when a bought of bad luck on the road will come to pass, and you also never know exactly how much that bad luck will end up costing you. So, in an effort to combat that unpredictability and bring a tiny bit of control back into the hands of drivers, the auto insurance industry was born.

“The benefit of car insurance is the transfer of risk from the customer to the insurance provider for a fee or premium,” says Greg Isaacs, president of CoverHound Insurance Solutions. “This allows the customer to avoid a large personal financial loss, which could severely impact his/her financial well-being. It also provides people with peace of mind.”

Car insurance is a requirement in every state except New Hampshire, which “allows drivers to be licensed and register vehicles without prior proof,” continues Isaacs. And getting auto insurance is a relatively simple undertaking, provided you’re OK with handing over basic personal information along with details related to your car and driving record.

Then things get a little weird.

Insurance companies also ask for personal information (gender, marital status, occupation, driving history) about all people in your home who are of driving age, which could include teenagers or roommates. This, of course, begs the question, “Why?”

“Insurers want to know who else may have access to your car because this could affect claims they have to pay out,” says Amy Danise, auto insurance expert at NerdWallet. “They care about the 16-year-old who just got his license or the brother-in-law with the bad driving record who just moved into your house. Insurance companies want a complete picture of their potential ‘risk.’ This helps them price policies more accurately.”

So, is it possible that your roommate’s lengthy list of speeding tickets and that DUI from last spring could increase your auto insurance rates? Maybe. “If the roommates will be driving your car regularly, the insurer will take into account their driving record and age when setting your rate,” continues Danise. “If they have records worse than yours your rate will go up.”

You might be thinking that the best way to avoid having to pay for other people’s mistakes is to omit the very existence of your roommates on your application, or at the very least refuse to disclose their personal information. But it won’t work. “Don’t bother fudging information because [insurance companies are] asking you questions that they know the answer to,” continues Danise. She notes that in addition to pulling your DMV report they can also verify that you own a home and even buy reports that show who else is in your household and what other registered vehicles you have. Isaacs adds that, “if an agency or carrier knows there are other drivers in the household and the applicant is refusing to share any information regarding the other parties, they may decline to provide a quote.”

And even if you do manage to successfully omit your roommate’s information and get coverage, it will come back to haunt you if that person gets into an accident while driving your car. “If applicants omit these details, they are taking the risk that their insurance company may deny a claim for misrepresentation, especially if the driver involved in the incident was never disclosed on the application,” continues Isaacs. “Not including the other driver’s details would result in any quote provided being void. And worse, if a policy is sold, the application would be considered invalid, due to the misrepresentations.”