Will Auto Insurance Cover an Unlicensed Driver?

Your car insurance in Ontario covers a lot of different things. In the province, you must carry the minimum level of third-party liability insurance, accident benefits, direct-compensation property damage, and uninsured/underinsured motorist coverage.

But that’s just the basic overview. When it comes down to situations, different people driving your vehicle, conditions under which they are driving your vehicle – well, that’s when it gets confusing. In this blog post, we’re honing in on unlicensed drivers.

Driving without a license may result in a fine of at least $200 and upwards of $1,000. Because it is illegal, we highly recommend driving with a current license and valid vehicle registration to avoid any sticky situations. But will your auto insurance cover you if an unlicensed driver drives your vehicle and gets into a wreck? Let’s get into it:

Which drivers are covered by my insurance?

In short, an active policy – so a policy that is being paid for and has been renewed upon its renewal date – will cover all drivers of your vehicle who are licensed.

Your auto insurance policy may extend to any licensed household members you have as well. Your car insurance covers the vehicle, not yourself. You can also have your policy include its regular drivers, likely yourself and perhaps one or two other people, and occasional drivers. Someone who borrows your car once or twice a year may not need to be added to your policy. Discuss with your insurer who needs to be added to your policy.

What about unlicensed drivers? If an unlicensed driver is driving your car with your permission and gets into a wreck, your claim will likely be denied, as driving without insurance is illegal activity.

If the driver who is unlicensed is driving your car without your permission, then you might be covered. If they stole your vehicle, chances are you might have coverage under your collision/comprehensive sections of your auto insurance.

Ultimately, we don’t recommend driving without a valid license. Renewing your license, renewing your licence plate in Ontario, and keeping your registration up-to-date are all means of avoiding an untimely ticket. This, in the long run, will help you to save money, and can avoid your insurance from getting impacted negatively.

When are drivers excluded from coverage?

Some drivers are considered higher risk than others in the perspective of insurance companies. Drivers can be deemed high-risk and need specialized, non-standard high-risk auto insurance for any number of reasons – whether it’s because they’ve been involved in numerous at-fault accidents, had numerous speeding tickets, or because they have previously been cancelled due to non-payment.

How is this relevant? Well, say for example you were a person in a household of two or more people, and you, the owner of your own vehicle, had a perfect driving record. Someone else in your household has a particularly poor driving record due to multiple ticket violations. You can choose to omit this individual from coverage so that their history won’t affect your insurance.

Who can drive your car under your insurance, anyway? Auto policies generally automatically include “permissible” parties – so individuals in your household who drive your car with your permission – but this can push the cost of premiums, so having them specifically excluded can save you a couple bucks.

OPCF 28A: Excluded Driver

As mentioned above, you can specifically choose to omit drivers from your auto insurance policy to protect your premiums. An excluded driver is intentionally removed from your Ontario car insurance with this policy, and if they do use your vehicle with or without your permission and get into an accident, they will not be covered by your insurance – and nor will the accident.

Essentially, by signing this endorsement, the following will come into effect:

• The omitted driver will not receive any accident benefits.
• If the omitted driver is caught driving the car in question, they can be charged with driving without insurance – which is a serious offense.
• The owner of the vehicle and the excluded driver will be held responsible for injuries or damages caused if the excluded driver is found driving the automobile.

An alternative that can also help you save money but permit the excluded driver to continue driving your vehicle is OPCF 28, which only reduces coverage for the higher-risk driver. OPCF 28 allows for some liability protection, damage, and loss protection – and you determine the deductible and limit. OPCF 28A completely removes all insurance for the selected driver.

Other considerations for adding drivers, excluding drivers, etc.

In some very rare cases, an individual may own a vehicle without having a driver’s license. This could be due to a variety of reasons, such as the owner being ineligible due to their advanced age or because of a medical condition. In such an instance, the owner of the vehicle (i.e., the unlicensed individual) may enlist or even hire a motorist who is licensed to drive them around. This may require specialized coverage on both ends – for the driver, who may technically be conducting business activities, and for the owner of the vehicle, who may need to adjust their policy to account for the new primary driver.

Another consideration worth noting is if your vehicle is stolen by an unlicensed or even underage driver and is damaged. In this case, coverage limitations can apply, but it’s best to discuss with a broker what protection would kick in for a situation such as this. Generally, theft and vandalism can be covered under the comprehensive portion of your auto policy, but the auto insurance claims process might be a little different for an instance where the car was both stolen and wrecked. Discuss with your broker for more information about this.

And, again, if you need assistance or advice for adding drivers, excluding drivers, or just general insurance help, our Excalibur experts are here in your corner and ready to help! Get an auto quote or give us a call today.