Many drivers occasionally lend their vehicles to friends or family members. In these cases, you may be wondering – does car insurance cover other drivers? Obviously, your insurance protects you while you’re driving. But what happens if someone else is behind the wheel and they get in an accident? Would the borrower’s own insurance pay?
These are all important questions to think about, preferably before any accident happens. That way, you’ll know exactly what steps to take and whose insurance you should file a claim with.
Let’s take a look at the ins and outs of car insurance coverage for other drivers to see just what might happen in every scenario.
If you’ve ever had someone ask to borrow your car, you’ve probably wondered, “Can someone else drive my car under my insurance?” Loaning out a vehicle is a common thing, but is it a good idea? Like many questions, the answer to this is, it depends.
You will probably want to know that the person is a safe driver and has a good driving record. You’ll also want to verify that he or she has a valid driver’s license – never assume.
Beyond that, you should be wondering, “Does my car insurance cover other drivers? Or will their insurance cover my car while they’re driving it?”
You might have heard that “car insurance follows the driver.” This is only partially true.
Liability insurance typically follows the driver; however, comprehensive and collision coverage follows the car. As long as the driver has your permission to drive your vehicle and isn’t explicitly excluded from your policy, it is usually your insurance that will cover damage to your car when someone borrows it and causes an accident.
This also implies that if the person borrowing your car has an accident, it could end up on your insurance record. For this reason, you should be selective about who you allow to drive your automobile.
You’ll want to read all the fine print in your policy to see the exact limitations of covering other drivers. Every insurance company is a bit different, so to know for sure what applies in your scenario, head to your policy document. It should detail everything you need to know about letting someone else drive your car.
Most states consider the auto insurance policy covering the vehicle as the primary insurance in an accident. This means that if someone borrows your car and causes an accident, your insurance will be the one that foots the bill. Because your friend was at fault in the accident, the other driver’s insurance won’t pay for anything.
As we mentioned above, this coverage would include liability, as well as collision, medical payments, and comprehensive if you have them.
Your liability coverage would be used to pay for the car repair bills and medical bills of the other driver. It doesn’t cover your friend’s medical bills or the damage to your car. If your friend has their own insurance, they may be able to use some of their liability coverage, but chances are the burden will fall on your coverage.
If you have collision coverage, it can help cover the costs of repairing your car. Naturally, you’ll need to pay a deductible first, which is something you’ll definitely want to make your friend responsible for. It’s the least they can do after wrecking your car!
Medical payments coverage is another coverage that might kick in if your friend gets injured. It will help to cover their medical bills, which is especially good if they don’t have great health insurance.
Finally, comprehensive coverage will cover your borrowed car if it suffers from an act of god while your friend is at the wheel. This could mean they hit a deer or a tree falls on top of the car. These situations aren’t really considered at fault, but you can still blame your friend for being in the wrong place at the wrong time if you want to.
With all this said, not every insurance company offers full coverage when someone else is driving your car. They might also require a higher deductible before coverage kicks in. These are intricacies that will be more closely defined in your specific policy, so always check that out before handing over your keys.
Here’s an interesting scenario. What if you had a bad argument with a family member, said some things, and stormed off in opposite directions? Little known to you, your loved one grabbed the keys to your car, zoomed off in anger, and ended up rear-ending a car in traffic.
Do the same stipulations on car insurance coverage for other drivers we covered above apply?
In short, they might not. Most policies do define what’s known as permissive use. That’s when you give someone permission to use your car. In these amicable scenarios, your insurance will likely be responsible for paying for any at-fault accidents.
But if you didn’t give permission to use your car? That’s described as non-permissive use, and it may get you off the hook.
That said, if your loved one doesn’t have any insurance, you may still need to file a claim with your insurance to help foot the bills.
Luckily, if a thief ends up taking your car on a joy ride and crashes, it falls under the non-permissive use category. You likely won’t be held accountable for any damage they cause to other vehicles or property. That will be on their shoulders if they have insurance, or unfortunately, on the other driver’s insurance (which is a great reason to look into uninsured motorist coverage if you haven’t already).
That said, if your car ends up getting trashed, you may have to rely on your insurance to foot the bill. This is where your personal collision and comprehensive coverage might come in handy. You may be able to take legal action against the thief to recoup some of the repair costs, though.
You should always vet other drivers before handing over your keys. Making sure they are properly licensed is important for keeping everyone on the road safe!
But if someone without a license lies or misleads you about certain details, borrows your car, and ends up getting into an accident, what happens then? Does your car insurance cover other drivers in that situation?
Well, in most cases, your insurance probably won’t provide coverage. That’s because this driver isn’t legally supposed to be operating a vehicle, so this falls outside of their jurisdiction.
The same goes for a driver who may be way less experienced than you. If you let your 15-year-old nephew who just got their permit yesterday take a spin around town, your insurance might put up a fight if they’re in an accident. That’s because they’ve based your premiums on someone with your experience level driving the car. They might say it’s not fair to provide coverage because it was a drastic increase in on-road risk by handing the keys to a far less experienced driver.
If your friend has their own insurance, you might be wondering – can they file a claim with their provider? They might be especially insistent on trying this if they feel bad about causing an accident and want to take responsibility. After all, filing an at-fault claim on your insurance could cause your rates to spike in the future.
Unfortunately, that’s not how it works in most cases. Since they were driving your car, and insurance follows the car, your insurance will have to be the primary coverage.
That said, they may be able to use their insurance for secondary coverage. As an example, let’s say you have coverage on the lower side. If the accident was pretty serious and caused $20,000 in vehicle damage and your property damage coverage is only $15,000, they may be able to use their insurance to cover the remaining $5,000 in liability.
In some cases, though your insurance may directly pay all the bills, they may reach out to your friend’s insurance company after the fact for reimbursement. That all depends on your state’s laws and the specifics of your policy, though.
When applying for a car insurance policy, one of the questions you’ll be asked is, “are you using your car for business purposes?” The reason for that is because personal auto insurance is not the same as commercial auto insurance. It offers more liability coverage because businesses often have more valuable assets in play. This can lead to more damage if there’s an accident.
With that said, if an insurance company finds out you got into an accident while conducting business, they may refuse to cover you. The same goes for your friend. While you might not have a business yourself, if they borrow your car for making a delivery or other commercial purpose, this still counts as a business activity. So if they get in an accident, your insurance will likely deny coverage.
A common situation where a vehicle owner’s policy may not cover a borrower is when a person uses the car on a regular basis. That person, depending on the policy, might need to be specifically listed as a driver under that policy. In some cases, members of the same household are covered unless specifically excluded, but again this is not a universal rule.
Your best bet? If you know someone will frequently be borrowing your car, just add them as another driver on your policy. If you’re worried about the cost increase, just ask them to pitch in a few dollars each month. Being safe is sometimes worth the extra upfront cost.
This one is tricky. Some insurance companies see drinking and driving as an intentional act. The driver is knowingly putting themselves at risk of an accident, so the company might refuse coverage. Some states even let insurance companies write this stipulation directly into their policies.
That said, it’s not an open and shut case. Insurance companies will typically investigate the circumstances of the crash to see just how much drinking played a role.
If this unfortunate circumstance happens to you, you’ll want to get in contact with your insurance right away to see what your options are. You may even want to involve a lawyer since your friend will likely have charges against them.
Moral of the story when it comes to loaning out your car? Think carefully about who you’re handing the keys over to, double-check your policy for any stipulations, and reiterate to them the values of driving safely!
But what happens when you borrow a car? As mentioned, comprehensive and collision insurance follows the car, so if you’re at fault in an accident while borrowing another person’s car, it is the car owner’s insurance that would cover damage to his or her vehicle. However, your own insurance would be “secondary coverage,” meaning that it would be used for damage above the limits on the vehicle owner’s policy.
You would also be responsible for personal liability. So if other people are injured, or other property is damaged in an accident you caused, you would need to file a claim with your own insurance company for the liability.
If you’re not insured with Freeway Insurance, chances are you’re paying too much for insurance. Request a free auto insurance quote online or over the phone at 800-777-5620 and find out how much you can save on auto insurance.