It depends. Many people occasionally lend their vehicles to friends or family members. In this situation, you may be wondering – does my car insurance cover other drivers? Obviously, your insurance carrier protects you while you’re driving. But what happens if someone else is behind the wheel and they get in an accident?
Let’s take a look at the ins and outs of what happens when you lend your ride to someone else.
If I Loan My Car to Someone, Will My Insurance Company Cover Them?
Again, it depends. It depends on what kind of coverage you have and if a crash happens while someone else is behind the wheel of your vehicle. Loaning out a vehicle is a common thing, but is it a good idea?
At the least, you should know the person well enough to feel confident in their ability to drive safely. You’ll also want to verify that they have a valid driver’s license.
You might have heard that “car insurance follows the driver.” This is only partially true.
Liability insurance typically follows the driver; however, comprehensive insurance and collision follow the vehicle. As long as the person has your permission to drive your vehicle, it is usually your full coverage car insurance that will handle damage to your ride when someone borrows it and gets in an accident.
This also implies that if the borrower has an accident, it could end up on your 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 car policy to answer the question: does my car insurance cover other drivers? Every 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 auto.
Will a Driver’s Insurance Cover Another Driver Who Causes a Wreck?
Most states consider the auto insurance policy protecting the vehicle as the primary in an accident. This means that if someone borrows your wheels and causes an accident, your insurance carrier will be the one that foots the bill for the damages, repairs and injuries suffered by the other parties.
As we mentioned above, this would include liability, as well as collision, personal injury protection (PIP), and comprehensive, if you have them.
For example, in the event of a crash, your liability would be used to pay for the repair bills and medical bills of the other driver. It doesn’t take care of your friend’s medical bills or your property damage. If your friend has their own, they may be able to use some of their liability, but chances are the burden will fall on your liability coverage.
If you have collision, it can help pay for your repair costs. Medical expenses coverage is another that might kick in if your friend gets injured. It will help to pay their medical bills, which is especially good if they don’t have great health benefits.
Finally, comprehensive will protect your borrowed car if it suffers from an act of god while your friend is at the wheel and needs repairs. This could mean they hit a deer or a sudden hailstorm hits. 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.
Does Car Insurance Cover Other Drivers if They Take My Car Without My Permission?
Probably not. Most policies define permissive use. That’s when you give someone consent to use your vehicle.
If a thief ends up taking your wheels 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, or unfortunately, on the other driver’s carrier (which is a great reason to look into uninsured motorist coverage if you haven’t already).
That said, you may have to rely on your full coverage to foot the bill. This is where your personal collision and comprehensive might come in handy. You may be able to take legal action against the thief to recoup some of the repair costs, though.
What if Someone Who Borrows My Car Doesn’t Have a License?
In most cases, your carrier 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 agent might put up a fight in the event of an accident. That’s because they’ve based your premiums on someone with your experience level driving. They might say it’s not fair to provide protection because it was a drastic increase in on-road risk by handing the keys to a far less experienced driver.
What If I Loan My Car to Someone Who Has Their Own Insurance?
Typically, it doesn’t matter. If you loan your ride to someone and they have an accident, you will still be on the hook.
What If Someone Uses My Car for Business?
When applying for a car 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. It offers more liability 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 insurer finds out you got into a car accident while conducting business, they may refuse your claim. The same goes for your friend. While you might not have a business yourself, if they make a delivery or do some other commercial purpose, this still counts as a business activity. So if they get in an accident, your insurance agent will likely deny coverage. If you have a home office, you might provide that information to your agent.
What if Someone Uses My Car Regularly?
If you know someone, such as a spouse, will frequently be borrowing your car on a regular basis, just add them as another driver on your policy. If you’re worried about the cost amount increase, ask them to pitch in a few dollars each month. Being safe is sometimes worth the extra upfront cost.
You should probably plan to list all licensed household members as possible drivers on your policy, just to be on the safe side.
What If Someone Gets a DUI While Borrowing My Car?
This one is tricky. Some insurers see drinking and driving as an intentional act. The person behind the wheel is knowingly putting themselves at risk of a car accident, so the company might refuse coverage. Some states even let companies write this stipulation directly into their policies. That said, all the information contained in a police report would be examined.
If this unfortunate circumstance happens to you, you’ll want to get in contact with your carrier right away to see what your options are, especially in the event of an accident. You may even want to involve a lawyer since your friend will likely have charges against them. In this situation, asking “does my car insurance cover other drivers” could have different answers.
Can I Drive Another Car on My Insurance Coverage?
What happens when you borrow a friend’s car? As mentioned, comprehensive and collision follows the auto, so if you’re at fault in an accident while being the borrower, it is the owner that would repair damage to his or her vehicle under a standard auto policy. However, your own would be “secondary liability 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 insurer for the liability and include all the pertinent information.
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! And remember, there are different state laws when it comes to who is responsible for what when you let someone else get behind the wheel of your ride.
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