Colorado man finds mystery driver on insurance policy — premium spikes $312. Here’s the lesson
Owning a vehicle is expensive, thanks to the cost of auto insurance. So, when you uncover a hidden cost that gives you pause, you’re going to ask questions.
But what if you end up being charged extra for an additional driver you’ve never heard of? That’s what happened to Colorado’s Ed Fan, who gets his insurance from Progressive.
Fan received a notice that his six-month auto insurance premium was rising by $312 due to an additional driver in his household his insurer had identified. Not only was the information false, but Fan had to jump through hoops to convince his insurer that the driver in question was not, in fact, a member of his household with access to his vehicle.
Here’s how he took it upon himself to resolve the problem, and what you can do to safeguard yourself from the same issue.
Aggregate website Policygenius estimates the average cost of a full-coverage auto insurance policy at $136 per month, or $1,638 per year.
However, different factors can determine how much insurers can charge you. These include your location, make and model of your vehicle and the number of drivers on your policy.
It’s not uncommon for auto insurers to charge higher premiums for additional drivers. You may, for example, find that your premiums rise if your teenager gets their license and you add them to your policy.
In Fan’s case, the insurance company was barking up the wrong tree when he was charged for an extra driver he’d never met. As Fan confirmed, the only other inhabitants of his household are his four dogs who obviously aren’t driving his car.
So what happened? It turned out his insurance company used a third-party database to search for hidden drivers. That database erroneously identified a driver named Lawaia with a 31-letter last name he couldn’t pronounce.
In response, Fan called his insurer to have Lawaia removed from his policy. But he was told he needed to speak to the underwriting department. He spent hours dealing with them before making any progress. Eventually, Fan was required to fill out a form confirming he had no idea who the added driver was.
“It does appear that the burden falls on me to prove that this person doesn’t exist and is not related to me or drives my vehicle,” he said, adding he was so aggravated by the experience that he filed a state insurance complaint.
Auto insurance holders don’t always disclose all the drivers in their house, as it leads to premium rate increases. But hidden drivers do cost the auto insurance industry an estimated $10 billion per year in uncollected premiums and accidents.
For this reason, insurance companies commonly rely on additional driver discovery reports to identify hidden drivers. These databases cross-reference known addresses and license information to see if insurers are being cheated. The problem, though, is that these databases can be faulty.
“There are certainly times when the additional driver report is in error,” said insurance broker Bruce Swicker, adding that the additional name gives him pause.
The other issue is that even if an additional driver discovery report identifies a legitimate person living in a household, it’s not a guarantee that they’re driving.
“If they are in the household, the assumption is that at some point if they have access to the vehicle that they may very well drive it,” Swicker added.
It’s important to review your insurance policy every year to determine how up-to-date your policy is. Not only do you need to ensure that the information is correct, but you also need to confirm you’re being charged only for actual drivers.
Additionally, make sure your vehicle’s usage is classified correctly. If you work from home and don’t drive a car to work every day, you may be eligible for a lower premium than if you were commuting regularly. If you’re not sure whether you’re being charged appropriately by your insurer, question your bill before you pay it.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
