What is the difference between named driver and any driver car insurance?

How do you ensure that anyone driving your vehicle is covered by your insurance? There are many types of car insurance coverage, and not all work the same way.

However, in most circumstances, standard auto insurance should be enough for you to give infrequent permission to someone else to use your vehicle, provided they have liability coverage and a valid license.

In some situations, however, it might make more sense to have either named driver insurance, which generally has lower rates, or any driver insurance, which comes with higher rates but greater flexibility. Read on to learn more about the difference between a named driver and any driver car insurance.

Your Insurance Coverage and Other Drivers

Most standard auto insurance policies will cover temporary and occasional use by other drivers. This is referred to as permissive use, and it’s only for drivers who are given infrequent permission to use your vehicle. Infrequent is generally defined as less than 12 times a year.

If your policy allows permissive use, it’s generally sufficient to let others drive your car occasionally.

However, it may not be enough in some cases. Perhaps, for example, you have a small business with several employees who may need to use your vehicle regularly. In situations like this, you may need to explore named or any driver policies or even look into the best business car insurance options.

Named Driver Insurance vs. Any Driver Insurance

In named driver car insurance policies, there is no permissive use clause. Even if you give a friend or family member permission, if they are not named on the policy, they will not be covered in a crash.

Any driver insurance coverage doesn’t have a permissive use clause because you are paying a higher rate to allow any driver to use the vehicle.

State law does require that all drivers, regardless of whether they are covered by any driver or named driver insurance, carry the minimum liability insurance. You can get non-owners car insurance coverage, which will meet the state’s minimum requirements for insurance.

When to Choose Named Driver Insurance Over Any Driver Car Insurance

Named driver insurance is generally cheaper than any driver insurance. This is because there is less risk when car insurance companies rate each driver individually to calculate rates.

In the case of a named insured driver, the company has the driver’s age and driving history and can calculate a rate for the policy that meets the profiles of all these named insured drivers.

With car insurance for any driver, the risk is greater as the insurer does not have any driver profiles to base its calculations on. For this reason, rates will be much more expensive than named driver insurance.

Why Choose Any Driver Car Insurance

Any driver insurance is useful for small businesses that might require several employees to share a vehicle or if you have a business with multiple vehicles used by multiple drivers.

Any driver’s car insurance works for small businesses because it doesn’t restrict which employees can use which vehicles. It also means that anyone new at the company is covered without adding them to a policy.

Case Studies: Named Driver vs. Any Driver Car Insurance

Case Study 1: The Safe Driver Discount

John, a 35-year-old with a clean driving record and no previous accidents, was looking to get a car insurance quote. He provided all the necessary information, including his personal details, vehicle information, and driving history.

Due to his safe driving record, he was eligible for a safe driver discount. As a result, John received a lower insurance premium compared to drivers with a history of accidents or traffic violations.

Case Study 2: The New Car Owner

Emily recently purchased a brand new car and needed car insurance coverage. She provided the required information, including her personal details and the details of her new vehicle. Since her car was equipped with the latest safety features and anti-theft devices, Emily qualified for additional discounts.

These discounts helped reduce her insurance premium and provided her with comprehensive coverage for her new vehicle.

Case Study 3: The High-Risk Driver

David, a 22-year-old with a history of speeding tickets and one at-fault accident, needed car insurance coverage. Despite being considered a high-risk driver, he still had options for obtaining insurance.

David disclosed all his driving violations and accidents, allowing insurance companies to accurately assess the risk associated with insuring him. While his premium was higher compared to low-risk drivers, David was able to find an insurance provider that offered coverage suitable for his needs.

Case Study 4: The Multiple Policy Discount

Sarah already had a homeowners insurance policy with an insurance company and decided to bundle her car insurance with them as well. By combining her policies, Sarah became eligible for a multiple policy discount.

This discount resulted in a reduced premium for both her home and car insurance, providing her with cost savings and the convenience of managing both policies with a single insurance provider.

The Bottom Line on Named Driver vs. Any Driver Insurance

If you own a small business with several employees needing to use your vehicles, you may prefer the flexibility that any driver insurance coverage offers. This flexibility does come with a price tag, though, as the greater risk to your insurer will mean you will be paying a higher rate for your coverage.

Named driver coverage or even basic permissive use will be sufficient for many drivers.