Do I need insurance to drive someone else’s car?

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Things to Remember...
  • Auto insurance typically follows the car, but in some cases, it can follow the drivers on the policy as well
  • When you borrow a car, some of the coverage options that you carry on your existing insurance policy will extend while you’re driving the borrowed car
  • Liability coverage under your existing insurance will automatically follow you when you drive cars that aren’t on your policy. Coverage only follows you when you don’t own the vehicle you’re borrowing
  • If you rent a car or borrow a car to replace one of your vehicles while it’s being repaired or serviced, your physical damage coverage may extend to the temporary substitute
  • The existing policy that’s being carried on the policy that you’re borrowing may still cover you even if you’re not listed on the policy. Coverage extends under the permissive user provision

If you look at the declarations page of your insurance policy, it’s easy to identify what’s covered and what’s not. After all, the declarations page includes vehicle information, the drivers on the policy, your coverage, and the coverage limits you carry.

Unfortunately, the declarations page doesn’t directly explain how coverage extends when you borrow a car. At surface level, auto insurance follows the car on the policy rather than the driver.

In most cases, you can loan your vehicle out to friends or family members and they’ll be covered if they have permission to drive the car.

Insurers don’t tell you that your auto insurance might even help cover accident claims when you’re in a borrowed car, but do you need that coverage?

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How Your Liability Insurance Protects You

If you have existing insurance on your car, elements of your policy will follow you when you’re driving someone else’s car. It’s important that you recognize that only elements of your policy will extend.

Most commonly, your liability coverage pays for claims that occur in listed vehicles, rented vehicles, and borrowed vehicles.

Under a standard insurance policy, your liability coverage is one of the few basic coverage options that will automatically protect you when you operate a borrowed car.

One of the reasons the coverage extends is to protect your assets if you’re in an accident, and the victim sues you instead of the owner of the vehicle. The coverage extension also helps when the car you borrow isn’t insured.

Will physical damage coverage on your policy extend to a borrowed car?

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When you rent a car, there’s no point in buying the agency’s supplemental rental car coverage when you have a full coverage policy in effect. Your coverage extends to the rental since it’s acting as a temporary replacement for your car that’s listed on your insurance policy.

Borrowed cars may be treated differently. The only way that physical damage coverage on your policy will follow you as a driver is when you’re driving a car as a temporary substitute.

Not just any car meets the Personal Auto Policy definition of temporary substitute either. Here are the conditions that must be fulfilled for comprehensive and collision to pay for damages when you borrow a car:

  • You can’t have a financial interest in the vehicle
  • The vehicle must meet the definition of a private passenger auto
  • You must be driving the vehicle because you’re unable to use your car (e.g., breakdown, maintenance, repairs, destruction, or theft)

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Do any other forms of coverage follow you as a driver?

In most states, your Medical Payments or Personal Injury Protection coverage options will follow you in any car.

As long as the injuries that you suffered happened in an incident involving a vehicle, the insurer will help you pay for your medical treatment. These no-fault coverage options will also pay when you’re a passenger in the vehicle or a pedestrian.

Uninsured Motorist Protection is another one of those coverage options that helps to cover your medical bills.

Just like liability coverage extends to pay for third-party damages, your Uninsured Motorist Protection will extend to cover your medical bills when someone hits you, and they don’t have insurance. It doesn’t matter who’s vehicle you’re driving.

Your Liability Coverage Might Not Matter

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It’s nice to know that your existing liability limits will cover you when you’re driving someone else’s car, but the limits that you carry might not matter.

Under each policy contract, it says that insurance that’s being carried on the car is primary. This means that you can borrow a car and the coverage the owner carries on it will pay first.

There are only a few scenarios where the primary insurance policy won’t pay, and your carrier must step in to cover the damages. One scenario is when you’re listed as an excluded driver on the policy. The other is when you don’t qualify for coverage as a permissive user.

To be a permissive user, you must meet the following status requirements:

  • You must live outside of the insured’s household
  • You can’t be a child of the insured
  • You can’t have an insurable interest in the car
  • You must be over 25
  • You must have a license
  • You can’t have serious tickets or accidents
  • You can’t have regular access to the car

Should you buy insurance if you don’t have your own car?

It’s typical for people to assume they don’t need insurance when they don’t own a car. If you don’t have a license, and you don’t drive cars, that’s true, but not if you borrow and rent cars regularly. If you’re a licensed driver who simply doesn’t own a car, you should consider getting a non-owner’s insurance policy.

Non-owner’s insurance is for people who frequently drive borrowed and rented cars. It provides you with liability coverage to protect your assets just in case the owner of the car doesn’t have insurance. It also helps if the car is insured with low limits of liability.

If the coverage isn’t clearly defined in your policy, ask your agent. You should get quotes for coverage if you don’t yet have a policy for protection.

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