First the usual proviso - I do not current have an active P&C license, so take any advice/instruction as being from a very informed layperson, and that again, each state and carrier has a wide variety of chosen language specific to their contracts.
-ahem-
There are generally four or more categories of possible drivers on an insured vehicle (leaving out named operator entirely).
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Named insured - policy is in this persons name. The contract is specifically in this person’s name, and gets the widest coverage under the policy. Empowered to make changes on the policy, and of course, is part of the risk being involved in issuing the policy.
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Second named insured - specifically added to the policy, is also empowered to make changes under the policy, including adding vehicles, drivers and adding or removing coverage. Also has the widest coverage under the policy unless specifically removed. Risk as a driver also counted toward policy, BUT, exceptions exist. I can (depending on carrier) have a non-driver, or driver covered under another policy listed as second named insured, but exclude them from actual policy coverage. An example, if your partner was driving and insured with a company car, you may want them able to make changes on your behalf, but excluded from your coverage because they have their own, and their driving record might raise your rates! Rare, but happens (if the carrier allows)
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Listed Drivers - drivers, almost but not always in your household, given permission to operate your vehicles and listed by name on the policy. This is where things can get a lot more tricky. For most carriers, they want to list anyone in your household, because they have access to your car, and often unsupervised access to your car. If you cover them, great, they go on the policy, they do affect your rates based on the usual risks, and the insurance card will list them by name. They cannot make changes to the policy without the consent of the first or second named insured. The category gets weird depending on the carrier - some assign them permission to all vehicles, some to a specific vehicle, and just about every obscure clause you can imagine. If they’re assigned to a specific vehicle or all vehicles, and that specific vehicle (or if all, at least one vehicle) has COMP/COLL coverage will usually transfer to a rental vehicle but again, a huge variety of options. If rated to drive, may raise rates, otherwise will generally be required to be excluded, which means they DON’T affect your rates, but you’ll be signing contractual language that says anything that happens while they’re behind the wheel is not covered by the insurance. There are different flavors of this option, but again, in general, no contractual obligation to your carrier to pay out in a loss.
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Permissive drivers - anyone who is NOT part of your household, or a frequent (generally once a month or less) driver, who is operating the vehicle with your permission. Doesn’t affect rates, doesn’t get proof of insurance, but coverage will generally apply up to the policy/vehicle limit for the specific vehicle they’re operating with your permission. [ Your mom flies in from out of state, and you lend her your car to run to the store to get groceries for the special meal she wants to make, and gets hit in the parking lot]
And then there are a lot more questions about co-insurance, fraud, the customer lying about frequency, lying about access to the vehicle, so on and so forth.
So, and back to the direct question a resident relative is generally category 3 - your carrier generally required you to list them and rates on them, or requires you to to exclude them. As I said, if you chose not to cover them or restrict their coverage in some way, then they may not get coverage in all circumstances. And some carriers are a lot more permissive than others in requiring or not requiring them to be specifically covered, but that’s increasingly rare.
On the other hand, a named insured is the contracted party, they get the most broad coverage, as should (with the rare exceptions I mentioned) the second named insured. But for everyone else… it’s not their policy. And there are so many exceptions and details.
For something most people deal with on a day to day basis, think of a phone contract. You can be covered on a friend or family member’s coverage, and still get to use your phone up to whatever limits selected. But only the contract owner, or whomever they specifically designate can makes changes. Even if it means suspending your coverage/usage, buying phones, getting new plans. The covered drivers/cell phone users have only limited options under the policy, but also don’t have much responsibility under the contract. In the end, almost all the financial burden (paying the bill, responsibility for providing factual information) rests on the named insured/contract holder.
Example - Not a policy I wrote, but one I managed a claim for. Husband and wife divorced, wife kept the vehicle, and the husband was required to keep it insured until it was transferred to her name. The wife was in a single vehicle accident (so no one else at fault), and it turned out that the husband had stopped paying for the insurance over three months (and two notices of coverage being cancelled) ago.
So named insured (policy in his name, wife was a listed driver but NOT second named insurance) abrogates his financial duty, and policy as cancelled for non-payment prior to the accident. We had no legal obligation to pay out on the claim. I did some digging, and had the wife provide me with proof (copy of the divorce settlement that clearly showed his responsibilities) and made a case to my supervisors that we should pay out because it’s ugly PR in this sort of case (and they were a … nicer? company than most) and it was approved. I got the stuff covered, and had the wife write a new policy with US ASAP, and forwarded the details to the subrogation team to determine if it was cost effective to go after the ex-husband.
So TL;DR, it gets very complicated, very fast. And in a LOT of cases, you have adjusters and underwriters get quite specialized. Sure, they’ve had training and in a perfect world, be able to give clear and precise answers, but if they normally handle one sort of risk evaluation (territory specialists, covered drivers, excluded drivers) but happen to be next in que when someone asks about rental car coverage, they may be winging it off half-remembered training or desperately searching their online or paper systems for the first thing they can find. While if it was in their normal rut, they could rattle off the answer to the exact language from memory.
People aren’t perfect. And the efforts to keep cutting costs and shoving more and more work down the throats of the least paid individuals means that even with the best intentions, they may be swamped. Happened to me at Progressive and CSAA, and continues to happen in most businesses AFAICT.
And yes, I’ve been trying to get a written copy of everything they’ve said so far.
for taking that step.
I didn’t think they were trying to give me the runaround on purpose. It was probably just run of the mill bureaucratic incompetence of the sort