If you’ve ever handed your car keys over to a friend or family member, you’ve probably felt that slight concern that it comes back in one piece. But what if your car doesn’t come back in one piece, or other people get hurt in an accident while it’s being driven by someone who isn’t you? What does that mean for your (or their) insurance?
Whose Car Insurance Will Cover the Damages?
|IF ...||SHORT ANSWER|
|The driver is named on your policy||Your insurance should cover the damages|
|You allowed the driver to use your car||In most states, your insurance will likely cover the damages to others|
|You did not allow the driver to use your car, or they are excluded on your policy||Your insurance will not cover the damages|
|Your car was stolen||The thief would be held accountable for the damages to others|
Typically, car insurance coverage travels with the vehicle, not the driver, meaning the policy that covers the car involved in an accident will likely be the insurer paying out for damages. But this will also depend on the circumstances of the driver:
If the driver is named on your policy …
Your insurance should cover the damages.
Although you own your car, other drivers may be added to your policy if they are likely to drive the car often. Your spouse and dependents will typically be added to your policy, but family members or roommates that share your address could also be required to be named on your car insurance policy because they could have access to your vehicle’s keys. (Think “Ferris Bueller’s Day Off” – The kids weren’t supposed to drive Cameron’s dad’s car, but they had access to the garage, so they did.)
If you allowed the driver to use your car …
In most states, your insurance will likely cover the damages to others.
Someone becomes a permissive driver of your car if you give them permission (or imply permission) to drive it. In most cases, this type of driver will be covered by your insurance, but not every policy has this provision, and not every state has the same laws, so it’s important to understand how your unique circumstances affect this type of coverage.
If your coverage applies, but the damages caused are greater than your policy limits, the driver’s personal policy may kick in to help cover the costs. Even if the driver doesn’t have their own car they can still get their own coverage, either by being added to your policy or by getting non-owner car insurance.
One thing that is important to note is that this coverage applies only to damages caused to the other party and their property. Your liability insurance won’t cover your friend’s injuries or damages to your car, but if you have MedPay coverage that may help to pay for their medical bills along with their personal medical insurance. Also, if you have collision coverage you will likely be able to use that to recover the costs of the damage to your vehicle.
If you did not allow the driver to use your car, or they are excluded on your policy …
Your insurance will not cover the damages.
It may be difficult to prove that you did not allow the driver to use your car, but in the case of an excluded driver, which means you’ve specifically named them in your policy as a person who will not drive your car,, your insurance will not cover any of the damage they cause. This includes both injury to others and their property, the driver, as well as damage to your vehicle.
If your car was stolen …
The thief would be held accountable for the damages to others.
If you have comprehensive coverage, you will be protected against the loss of your stolen vehicle and can look to your own insurance coverage to replace your car. However, you won’t be held liable for the damages the thief caused to anyone else.
Will My Insurance Premium Go Up If Someone Else Gets Into An Accident In My Car?
If you lend your car to someone else who causes the insurance company losses, your pristine driving record is only going to help you so much in the eyes of your insurer.
If someone is asking to borrow your car, you may want to make your decision based on how they are as a driver, since their driving can affect your record and raise your insurance rates.
Remember, your policy may differ from the typical rules regarding borrowed vehicles. Here are a few questions you may want to ask your insurance agent to understand what it means for you the next time you hand over your keys to someone else:
- Do my family members or roommates need to be added to my policy to be covered if they cause an accident while driving my car?
- Are there any excluded drivers on my policy?
- Do I have coverage that protects damage to my vehicle even if I’m not the one driving?
- Do I have coverage that can replace my vehicle if it is stolen?
Looking to find the right auto insurer for your needs? We compiled a list of the Best Auto Insurance Companies to help you find your match.