State Farm Auto Insurance Practice Test

What should a policyholder do when adding a new driver to their car insurance?

1. Remove an existing driver from the policy

2. Assess the driver's impact on the premium

3. Notify the DMV directly

4. Cancel the previous policy

The correct answer is: Assess the driver's impact on the premium

When adding a new driver to a car insurance policy, it's important for the policyholder to assess the driver's impact on the premium. This consideration is crucial because the addition of a new driver can either increase or decrease the overall insurance costs based on the driver's history, driving record, age, and experience. Insurers evaluate these factors to determine any necessary adjustments to the premium. By understanding how the new driver will affect the policy's cost, the policyholder can make informed decisions and budget accordingly. This proactive approach can help in anticipating any changes in the insurance cost and will guide the policyholder in discussing the new driver with their insurance agent or company. Other options, such as removing an existing driver or notifying the DMV directly, may not address the critical financial implication of adding a new driver. Additionally, canceling the previous policy is not necessary when simply adding a new driver, as policies often allow for such modifications without needing to be completely canceled and reissued.