Lending your car to somebody can make insurance coverage quite complicated. It’s important to understand all aspects of insurance coverage, especially when it comes down to how your car is covered if someone else drives it and causes an accident.
Can I drive any car with my insurance?
This is a more complex question than most people think. Although many assume that insurance follows drivers, the truth is that car coverage almost always follows the automobile.
Liability Insurance (most common)
However, there are exceptions to the rule when it comes car insurance. This is liability insurance. If someone has liability insurance coverage in their personal auto insurance policy they can follow the driver regardless of the vehicle being driven. As long as the plan covers the car, it is covered. The minimum requirement for drivers in all states, except New Hampshire is liability insurance. In general, a neighbor’s or friend’s vehicle can be considered an “eligible” vehicle under liability insurance.
Can someone not covered by my insurance drive my car?
While people often ask whether insurance covers a driver or a car, the most important question is whether other drivers are covered under your auto insurance. This area of auto insurance can be grayed out and may differ from one policy to the next. It is why it is so important to carefully review your policy to ensure that everyone is covered.
Insurance companies may not cover people who are not named in a policy. There are other clauses that might be applicable, such as where the “other driver” lives and their relationship to you. You can generally consider everyone who lives with your family covered by your insurance. However, some carriers may require you to include these individuals on your potential driver’s list.
Permissive Usage
Permissive usage is another important part of answering this question. For the most part, if you give somebody permission to use your car and they cause an accident, they will be covered by your policy. Things can get complicated if your insurance and that of the permissive person have different coverage limits. The car owner’s liability limits must exceed the permissive users’. This applies only if the permissive users’ liability limits are greater than the car owner. If someone other than you or the person you borrowed your vehicle causes the accident their insurance will always have to pay irrespective of who is driving the car.
There are exceptions to owner liability and permissive usage. This applies primarily to exclusion drivers under your insurance plan, and of course if you did not grant permission to an excluded driver to borrow the vehicle. For example if it was stolen. This means that you and your insurance policy are not responsible for any damages resulting from an accident.
There are many different circumstances when your vehicle might be used by somebody else:
- Theft: If your car gets stolen and causes an accident then you are not liable for any kind of damages/injuries that happens to any other vehicle/property/person, and the damages that happen to your vehicle likely covered under your own coverage.
- Use by a family member or friend If a family member or friend takes your car, their insurance will cover it. Your policy will provide secondary coverage.
- Uninsured friend may use your car without permission. You should expect that your insurance will cover any damage.
How To Avoid Being Held Liable
- If you allow a driver not covered by your insurance to drive your car and they cause an accident, you could be held responsible for the damages.
- You can also be held responsible for damages if you permit an intoxicated driver to your car or unlicensed driver.
How To Protect Yourself
To protect yourself, the best thing you can do is to make sure you are fully informed about your car insurance coverage. Talking to your insurance company about the exclusions and limitations of your policy will help you protect yourself and your car from any legal problems.
It is important that you are careful about who you lend your car to. You should only allow people you trust to drive it.
Summarized from an article by Trial Lawyers Freeman & Freeman.
