I spoke with a few potential clients today who are looking for auto insurance. The first call was from a lady who told me she was separated from her husband and wanted the policy in her name only. A short while later I received a second call from a gentleman looking for auto insurance for his wife since he was medically not able to have a drivers license.
In both cases I advised the clients to list their spouse on the policy for a few important reasons:
Both parties are obligated
Even if you are separated and not on the title, you are still obligated for any financial obligation that your partner creates unless otherwise court ordered. This means even if you keep separate records, accounts, and live in different locations, you will still be responsible for any financial obligations created by your spouses actions.
The carrier requires it
In many cases the insurance carrier either requires spouse (even separated ones) and/or household members to be listed. One of the reasons they do this is because it protects the spouse and also because coverage is usually extended to the spouse for personal injury protection even if they don't own a car or don't have insurance.
Insurance coverage does not create exposure
There is a big misconception that if you list a person on your insurance it will in some way harm you. Instead, having someone on your insurance policy affords them legal defense and coverage if it is a covered loss. The insurance policy only pays a liability claim when you would otherwise be "legally obligated to pay." This means the insurance company only pays when YOU are legally resposible for damages and could have been sued. This prevents you from having to pay for an attorney out-of-pocket even if its a frivolous suit.
Talk to an insurance agent and don't just get a policy that doesn't offer proper protection behind it.
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