Auto Insurance
Does Insurance Cover the Car or the Driver?
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A typical question regarding car insurance is whether it follows the car or the driver. In most cases, your insurance policy is specific to your vehicle, and you will need insurance for each car you drive.
If someone borrows your car, your insurance will cover them as long as you gave them permission to drive the car. If you drive someone else’s car, their insurance policy should cover you.
There are some exceptions, like when you travel and rent a car. Many private insurance policies cover car rentals, but call your insurer before you rent a car to find out if it’s something available to you and, if so, what the coverage limits are.
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Key Takeaways
In most cases, car insurance follows the car, not the driver. However, the person borrowing it must have gotten the owner's permission.
There are a few cases when car insurance can follow the driver. For example, your existing policy's coverage may extend to a rental car.
Your policy acts as primary insurance if someone else drives your car and causes an accident. Because of this, an accident caused by someone driving your vehicle may affect your premium when you renew your policy.
Does Auto Insurance Follow the Car or the Driver?
In most cases, your auto insurance policy follows your car. Despite being one of the more common myths surrounding car insurance, your insurance covers your vehicle whether you are driving or you let someone else drive. However, you must have given that driver permission to drive your car.
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In car insurance, permissive use means you have allowed someone else to drive your car, even if their name isn't on your policy. For example, if you let your friend borrow your car, that's permissive use. That means your policy covers the car while they drive.
When someone takes your car without your consent, that’s known as nonpermissive use. You aren't liable if they cause an accident while behind the wheel. The same applies if someone steals your car and, in the process, crashes. Your policy won’t have to cover the damages the thief caused, but you may be able to collect insurance money to help with car repair costs.
When Does Auto Insurance Follow the Car?
Someone can drive your vehicle with your insurance because, in most cases, your coverage follows your car. Cases when someone else is covered by your insurance when driving your vehicle include:
- The person driving your car is someone you’ve added to your policy
- You've given the person permission to drive your car
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While insurance follows your car in most instances, it isn't always the case. Some policies limit their coverage to people named in your policy. It's also possible that the coverage limits for another driver will be lower.
When Does Auto Insurance Follow the Driver?
Although generally insurance follows the car, there are exceptions, like when you rent a car while you’re traveling.
The rental company will offer car insurance coverage, but your personal auto insurance policy may offer adequate coverage. Be sure to contact the insurer to find out if your coverage extends to a rental as some policies don’t include this option. If it does, you may not need to purchase rental car insurance. You can evaluate the difference in cost and coverage to make an informed decision.
If your policy includes comprehensive and collision coverage, they may cover you while driving a rental. However, if you only have liability insurance, you may want to consider purchasing additional coverage so that you don’t face enormous costs for the rental if it is damaged.
Factors That Affect Whether Insurance Follows the Car or the Driver
Auto insurance typically follows the driver. But even if you’ve given someone express permission to drive your car, their coverage will still depend on the factors below:
Factors That Affect Permissive Use
Factors | How |
|---|---|
State | Although permissive use generally allows car insurance policies to cover other people who drive your car, laws vary between states. Some states won’t allow car insurance to cover people who borrow your car, even if you give them permission. It’s best to know what regulations apply to where you live. |
Insurance Company | Even if you live in an area where permissive use is honored, your car insurance policy says otherwise in the fine print. Some providers will not cover drivers unless you include them in your plan. If you’re not sure, contact your insurer to find out before letting someone else drive your vehicle. |
Listed Names on the Policy | If you know that a person will regularly borrow your car, like a roommate or your child, you may want to include their name on your car insurance policy. It ensures they have the same coverage limits as you while driving your car. Sometimes a driver not named on your policy will have a lower coverage limit. |
Permission to Drive | For another driver to be covered by your insurance when driving your car, your consent is essential, especially if their name isn’t on your policy. For example, if your sibling takes your car without asking for permission, then permissive use does not apply. Without it, your insurer won't cover them while they drive. |
What Happens if Someone Drives Your Car and Gets Into an Accident?
Does your insurance cover other drivers? Your policy covers your car, even if you're not the one driving if you gave the other person consent.
However, permissive use isn't the only determining factor in these situations — it also depends on your policy. Some insurers provide limited coverage to drivers not named on a policy for the car they’re driving. In some cases, your insurer may not cover any damages even if you gave permission.
The situation may change if the driver of your car didn't cause the accident. In these scenarios, the driver at fault will shoulder the cost of damage, depending on the laws of the state where the accident took place.
1
When Your Vehicle Is at Fault
If someone else drives your car and is involved in an accident, you will file an insurance claim the same way you would if you had been behind the wheel. Depending on your policy limits, your insurance will cover damages after you've paid your deductible. If your coverage is insufficient, in some cases, the person driving the car may be able to use their insurance as secondary coverage.
2
When Your Vehicle Is Not at Fault
In some states, the driver who caused the collision is liable for damages, and their insurance policy should cover the costs.
However, there are situations wherein the at-fault driver doesn't have enough coverage or is uninsured. In this situation, you could sue the at-fault driver or file a claim with your provider if you have uninsured or underinsured motorist insurance. In no-fault states, each driver’s insurance covers their costs, regardless of who was at fault.
Unless you live in a no-fault state, the driver who caused the accident is responsible for covering the cost of damages, including vehicle repairs or medical costs.
If your car's driver caused the accident, you must file a claim with your insurance provider. The process is mostly the same as if you were behind the wheel. The difference is if the cost of damages exceeds your coverage limits. In this case, the driver's policy may serve as secondary insurance and cover the rest of the expenses.
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Primary insurance is the policy that first covers the cost of damages to your vehicle. Since insurance follows the car and you own the vehicle, this will typically be your policy. It also means the accident may result in higher premiums when you renew your policy, even if you weren’t driving.
Secondary insurance is a supplemental policy that can help cover the cost of damages if you don't have enough coverage. This could be an insurance policy held by the person driving your car.
Let's say your car insurance policy only has state minimum coverage limits of 25/50/25. While driving your car, your relative was in a collision, causing damages of $30,000. Your policy will cover $25,000, maxing out your limit.
In that case, $5,000 in damages remains uncovered. That's where secondary insurance comes in. If the person driving your car has an insurance policy, it may cover the remaining amount.
What Coverage Is Used in a Permissive Use Accident?
Although the coverage limits may be lower if another person is driving your car, the following coverages will take effect as long as your policy allows permissive use:
- Auto liability coverage pays for the other driver's medical bills (and that of their passengers) if someone driving your car is at fault in an accident. It may also cover property damage.
- Collision coverage covers the cost of repairs from damages to your car. You can use it even if someone else was driving and caused an accident.
- Medical payments coverage helps with any treatment the person driving may require after the accident.
Tips When Sharing Cars With Other Drivers
Allowing someone to borrow your car occasionally with permission is ok as long as your policy permits it, but getting a joint car insurance policy might be a better idea if that person borrows your car regularly. You can also include the person's name on your auto insurance plan if they live with you. However, this approach may not work if you rent your car on platforms like Turo or Hyrecar. Check with the rental networks to find out what protection they can offer.
Add Driver to Policy
Adding a driver to your car insurance policy may be the best thing to do if someone from your household uses your car frequently. Your insurance provider may even require you to do this.
If you have a teenager, adding them to your policy is usually a more cost-effective way for them to get coverage than purchasing a separate policy.
Lend Your Car Responsibly
For another driver to be covered under your car’s policy, you must give your permission for them to borrow your vehicle. They cannot just assume that you gave your consent.
Besides the members of your household, your policy may also cover some people who do not live under your roof if they borrow your car, such as visiting relatives. Your coverage may also extend to your companion who drives during a road trip or friends and family members whose cars are under repair.
Frequently Asked Questions
We answered several commonly asked questions about car insurance to help you understand situations when someone else drives your car.
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About Mark Fitzpatrick
sources
- HyreCar. "Insurance Coverage and Protection for HyreCar Vehicle Owners." Accessed February 1, 2023.
- Insurance Information Institute. "Eight Auto Insurance Myths." Accessed February 1, 2023.
- Turo. "Getting Started on Turo." Accessed February 1, 2023.