Editor's note: This article first appeared on Insure.com andis reprinted here with their permission. Click here for the original post.

We often forget that our auto insurance policies are contracts.Besides paying your premium on time, you should abide by your carinsurance company’s rules.

But how can you abide by the rules when you don’t even know whatthey are?

Here are 10 common scenarios that Insure.com readers often askabout. If any of these hit close to home, quickly fix the issuebefore you get in a pickle.

1. You haven’t added a licensed teen to your carinsurance policy.

No one wants to raise their hand and offer to pay more for carinsurance. But insurers are permitted to consider all householdresidents when they price a policy, including a teen. Withholdinginformation about your teen driver from your car insurance companyis a big no-no.

And insurers have ways of finding out. They can pull reportsthat identify “hidden” household members. One such report from LexisNexis looks for“undisclosed” newly licensed drivers between ages 15 and 25. If your insurer finds out about your licensed teenager this way, itcan revise your premiums to include the young driver, or decide itdoesn’t want your business anymore.

If your insurer doesn’t find out about your teen until there isan accident, it still might cover the incident. That would bea lucky outcome, but you’ll pay back premiums based on the teendriver. Or, your auto insurance company may say it’s not coveringthe teenager and is dropping your policy because of your failure toinform it.

2. You let your adult child take your car with her whenshe moved to another state.

Sure, it’s so much easier to put off a call to your agent andlet your child move away with a family car. But when your car isbeing driven and garaged in a new area, the risks of you as acustomer have changed. Car insurance companies expect to beinformed about these changes. If your daughter were in anaccident, your insurer could say you concealed vital informationabout the vehicle’s location, deny your claim and cancel thepolicy.

If you want to do things the right way, add the child’s name tothe car’s title. Then your child can buy insurance for the car in her own name and using her new address. This willalso allow your child to register the car in her new state, whichmost states require.

3. You sold your car to your son but still carry theinsurance on it.

Uh oh. In general, you can’t carry insurance on a car in whichyou don’t have an “insurable interest.” Typically those withan insurable interest are the car’s owners, lienholders andco-signers – meaning those who would be affected financially ifsomething happens to the car.

Since you are no longer the car’s owner, it’s time for the newowner -- your child -- to buy car insurance for the vehicle. If he’s still a minor, you may have to be on the policy withhim. Minors typically must have a parent or guardian involvedin the auto insurance contract.

You could face problems submitting a claim if you have failed totell your insurance company about the ownership change. Or worse,the car insurance company could say you hid the change as a schemeto get lower car insurance rates, which would qualify as insurancefraud and a reason for it to deny claims and cancel thepolicy.

4. You want to finance and insure a car for a relativewho lives out of state.

Auto finance companies want evidence that the car loan is in thesame name as the insurance policy. Since you’re not the primarydriver of the car, nor is the car at your residence, it isdifficult, if not impossible, for you to insure the car.

You should contact the finance company to see if it will allowyour relative to be the “named insured” on a policy. If itagrees, your relative has the hurdle of finding an insurancecompany in her state that will permit her to insure a car shedoesn’t own. If she can find such a company, then she stillhas to list you and the finance company on the insurance as ownerand lienholder, respectively.

If you carry insurance on the car without telling your insurerabout the situation and your relative wrecks the vehicle, it’s verylikely the accident wouldn’t be covered. Your car insurancecompany is likely to call you out for misrepresenting who wasdriving the car and where it was located, and cancel thepolicy.

5. You lend your car to a friend for a few months anddon’t notify the insurance company.

Your car insurance policy typically will cover a friend whodrives your car occasionally, but it’s a different story when youloan your car out for a long period. The car is now housedsomeplace other than your residence, and someone else is acting asthe primary driver of the car -- both circumstances your carinsurance company wants to know about.

If your insurance company’s rules allow, you may be permitted toadd your friend as a driver to your auto policy, but most carinsurance companies don’t want to add a person outside of thehousehold. If that is the case, your friend should considerinsuring the car. Some insurance companies will allow someoneto insure a car that he doesn’t own, as long as the owner is listedon the policy.

If your friend crashes your car, your insurer can deny claimsbecause you concealed pertinent information about the “real” driverand vehicle location. That can leave you and your friend on thehook for damages he caused.

6. You sold your car and the buyer is making paymentsbut you’re still carrying the title and insurance.

Don’t keep your name and insurance on a car that another personpossesses!

First, as the owner – because your name is still on the title --you have vicarious liability for the actions of the person drivingthe car that you “sold.”

Second, you’re paying for insurance but any claims might not becovered. Your car insurance policy normally covers cars and driversof your household, not others.

If you’re in this situation, you should sign the title over tothe new party. He can easily get insurance once he registers thecar -- and you will no longer be held responsible for his actions.To protect your interest in the car, make certain you’re listed asthe lienholder on the car’s title and autoinsurance policy. That way you’ll be notified if hetries to sell the car or drop car insurance.

7. You’re delivering pizzas with your personalvehicle.

Most personal auto insurance policies exclude coverage if youuse the vehicle to deliver items, whether it’s pizza, newspapers,packages or medical supplies. Insurance companies see unsavory riskin delivery drivers because they are constantly on the road.

If you want to be paid to deliver items, you should change to abusiness-use or commercial car insurance policy. If you don’t andyou get caught driving for deliveries, you’re on your own tocompensate others for damages they sustained -- and the damages toyour own vehicle.

8. You let an "excluded driver" drive yourcar.

Big mistake. When you put a named-driver exclusion on yourpolicy it meant that the person listed is not covered under anycircumstances and shouldn’t be driving your car.

So if that person gets behind the wheel of your car, even in anemergency, and causes an accident, you and the driver will be theones to pay for any resulting injuries or property damage.

Hide your keys from any excluded driver in order to lower yourrisk of financial disaster.

9. You bought a new car weeks ago and haven’t told yourinsurer.

If you traded in a vehicle, then your car insurance policylikely extends the same exact coverage to your new car for alimited time. This means if you bought only liability on your oldcar, your new car would only have liability coverage.

The deadline for informing your insurer about the new car variesby insurer, but is typically 14 to 30 days. Here’smore about extending coverage to new cars.

Don’t bet on having automatic coverage, either; some carinsurance companies don’t give you any.

And if you’re adding a car rather than replacing one, you shouldbuy coverage for it before driving it off the lot.

If you’re outside the insurer’s automatic coverage period, orthere is no extended coverage on your new car, and you’re in anaccident, your insurance company won’t help you. You’ll be payingout-of-pocket for damages you do to your own car or others.

10. You haven’t told your insurance company that yourlive-in girlfriend drives your car.

Insurance companies hate it when you “forget” to tell them abouta driver who lives with you or regularly uses your car. Insurerscan’t charge you correctly if they don’t know about all licensedhousehold members, including a girlfriend or spouse.

If you recently got married or moved in with someone, let theinsurance company know immediately and have the person added toyour policy as a driver. If you fail to do so, don’t be surprisedif claims are denied if they cause an accident, or if you’re askedto pay back premiums based on the additional driver.

If your car insurance company believes you were intentionallyhiding the driver – say your girlfriend has a bad driving record --then it may say you committed fraud by means of misrepresentation.This means your car insurance company can cancel your policy.

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