Roommate May Require Added Car Insurance

If you've got a new roommate, you may hear from your auto insurance carrier.

Why? Because insurance companies assume roommates will drive one another's cars. And that, say insurance carriers, exposes them to more liability.

Consequently your insurance carrier probably will insist that you buy coverage for an additional driver.

Nothing in state law prohibits this common practice, says Ed Ives, a spokesman for the state insurance commissioner.

Insurance companies generally take one of three positions when they learn their insured has a roommate.

Some companies permit the insured to have the roommate sign an exclusion affidavit, promising not to drive the other person's car.

Others insist on coverage for an additional driver. Though there appears to be no statistical data to prove roommates drive one another's cars, the assumption is that they do.

If you don't choose one of these options, your insurance company is likely to cancel your policy.

Some insurance companies will not accept an affidavit from the roommate. They'll press for purchase of an additional driver policy.

Scott Carpenter of the Washington Insurance Council says he knows of no current application form that doesn't require a list of drivers in the household.

Asking about other licensed drivers in a household has been industry practice for decades.

For example, parents and teen-age drivers know their insurance policies, histories and rates will be linked.

But more people may be aware of this practice now because of societal changes.

Housing is more expensive, people marry later, share apartments and homes longer.

The cheapest way for roommates to handle insurance is for both drivers and vehicles to be covered under one company's policy, Carpenter says.

Multi-car discounts are common in the industry. And unless one driver has a poor driving record, one policy will cost less than two because it will generate one file and require the services of one underwriter and one agent.

Insurance applications also contain a notice about the Fair Credit Reporting Act that consumers should read.

The notice explains that a routine investigative report may be made using information obtained through personal interviews with third parties, such as neighbors, business associates, family members and others. Insurance companies generally hire outside firms for these investigations.

Sometimes such an investigation turns up the fact that a consumer has not truthfully completed the application form and has failed to list other drivers in the household.

What triggers such an investigation?

Traffic citations and accidents would be obvious reasons. But sometimes an investigation will be made when a consumer applies for insurance with a new company.

In one instance a consumer applied for insurance with a new carrier whose rates were nearly identical to those of her previous carrier.

The new company wondered about that and had an investigation done. As a result it was learned the consumer had not listed her roommates, and therefore had not truthfully completed the application.

If you need information on auto insurance policies, write us and ask for the updated cost-comparison survey done by the state insurance commissioner's office.

Happy endings

H.S.A., Everett: Hill Brothers of Lynchburg, Va., has refunded your $51.99. Thank you for your donation to The Times Fund for the Needy.

B.E., Enumclaw: Hampton Marketing Corp. of Medford, N.Y., has shipped your Kwik Stamp.

R.K., Maple Valley: Atlas Pen & Pencil Corp. of Hollywood needs the name you want on the pencils before they can be imprinted.

L.D.R., Kirkland: Pleased to learn the nurse's watch you ordered from Styles Watch Co. of Huntington Beach, Calif., has arrived.

Shelby Gilje's Troubleshooter column appears Sunday through Thursday in the Scene section of The Times. Do you have a problem? Write to Times Troubleshooter, P.O. Box 70, Seattle, WA 98111. Include copies, not originals, of documents indicating payment, guarantees, contracts and other relevant materials.