Does Insurance Follow the Car or the Driver?
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UPDATED: Dec 21, 2021
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- The insurance follows the car in most cases
- If you lend your car to someone and there’s an accident, your car insurance will cover the vehicle damage
- Insurance Companies may place a limit on how much they’ll cover if someone else was driving your car and they’re not listed on your insurance policy
If you’re in a situation where you’re sharing a car with someone, you may be wondering: does insurance follow the car or the driver?
In most cases, the insurance follows the car. This means if you lend your car to someone and there’s an accident, your car insurance will cover the vehicle damage. If you borrow someone else’s car and get into an accident, the same is true for you.
However, a few factors can complicate the situation. If you want to learn more about how exactly insurance coverage works in these instances, keep reading this article to find out.
Coverage in an Accident
In most states and in most cases, your insurance policies follow your car. So, when you lend your car to a friend or family member and they get into an accident, all the coverage policies you pay for will apply in that situation.
Unsure of how this will work? Here’s what you need to know based on what type of car insurance coverage you have:
- Liability Coverage – If the person driving your car is in an accident, this car insurance policy will cover the other person involved in the accident and will pay for their car repairs and medical expenses. However, liability coverage won’t cover your car or the person driving it.
- MedPay – If the accident injures the person driving your car, “medical payments” will cover the cost of their medical bills.
- Collision Coverage – This insurance policy covers your car in the event of an accident even if you weren’t the one driving it. Although you’re still required to pay your deductible, collision coverage does cover the cost of car repairs.
While insurance companies typically pay for the vehicle damage, they may place a limit on how much they’ll cover if someone else was driving your car and they’re not listed on your insurance policy.
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Exceptions to the Rule
The rule is that your insurance follows the car. But, depending on who you lend it to, your insurance company may decide not to cover them.
This happens in certain cases, such as:
- When the driver is unlicensed or driving with a suspended license
- When the car is being used for commercial purposes without a commercial policy
- When the driver is under the influence of drugs or alcohol
- When the driver is an “excluded driver,” or someone specifically listed as not covered
In these instances, you may have to pay for any damages and medical expenses out of pocket.
Another instance when this may occur? If the driver didn’t have permission to use your car in the first place.
Permissive Use vs Non-Permissive Use
When determining if they’ll cover the cost of an accident, insurance companies will factor in whether or not the driver had permission to operate the car.
This is often considered the difference between “permissive” and “non-permissive” use.
- Permissive Use – If you gave the driver permission to use your car, your insurance company will cover them if there’s an accident. The same is true for you if you were to borrow someone else’s car with their permission. However, your insurance may still reduce the coverage amount if the driver isn’t listed on your policy.
- Non-Permissive Use – If someone were to drive your vehicle without your permission, you wouldn’t be responsible for any damage that occurred. In this case, the driver’s insurance company would have to cover the costs.
Will Your Insurance Cover You When Driving Someone Else’s Car?
If you borrow a friend’s car with permission and get into an accident while driving it, their insurance will cover you. But, it may be reduced or limited coverage. While your friend’s insurance would be considered the primary insurance, yours would be considered secondary.
So, in certain situations, your insurance will kick in when needed. For example:
- If you caused the accident in the friend’s car and their policy has a coverage limit, your insurance coverage will have to pay for the rest.
- If your friend’s car doesn’t have certain coverage policies, then your insurance may have to pay for any damages or repairs that their insurance won’t cover.
So, if you’re planning on borrowing a car or lending your car to someone, make sure to check your insurance policies first to confirm that you’re covered.
Compare Quotes for the Best Deal
If you’re happy to lend your car to whoever needs it, then you need car insurance that protects both you and the driver. To make sure you’re getting the best deal on that insurance, it’s important to compare your rates to others for perspective.
When you use our website, you can find insurance deals quickly and easily with our three-step process. Simply input your zip code, provide your car information, and start comparing auto insurance quotes today.
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Allstate. What Happens If Someone Drives Your Car And They Get In An Accident? https://www.allstate.com/tr/car-insurance/my-friend-wrecked-my-car.aspx
Nolo. ‘Permissive Use’ Car Insurance Coverage. https://www.nolo.com/legal-encyclopedia/permissive-use-car-insurance-coverage.html