Am I Insured When I Drive Other Cars?

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Whether or not auto insurance follows the car or the driver is a common question and also a commonly misunderstood scenario.

Let's say you've done your homework and found a good insurance rate for a good policy from a good insurance carrier. You're a safe driver with a clean record, so your friend lends you their car for the weekend. Or vice versa—you lend your safe-driving, clean-record friend your car for the weekend. In the event of a collision: Whose insurance is responsible for covering it? The one who owns the car, or the one who was driving the car?

Generally speaking, auto insurance follows the car instead of the driver. Follows the car, meaning: if you lend your friend your car and your friend gets into a collision, your insurance would cover it, and if your friend lends you their car and you get into a collision, your friend's insurance would cover it.

However...there can be exceptions to this rule depending on the situation and the type of insurance coverage.

Since it's easiest, in this case, to spell out the exceptions to the rule, let's look at the scenarios where the insurance would follow the driver instead of the car.

Insurance follows the driver if:

  1. The insurance carrier of the person who lends the car only covers drivers specifically named in the policy.

    Usually you would need to explicitly exclude drivers on your policy for them not to be covered (in which case, it would seem odd you would lend your car to someone you exclude anyway, but that's beside the point). However, there are some insurance companies that need all drivers to be specifically named/included on a policy if they are to be covered.

    In general, though, your insurance will cover any person who you've given permission to drive your vehicle, including family members living with you and your dependent children away at school.

    It is important to note that insurance companies do generally expect any family members living in your household who will be driving your car on a regular basis to be specifically named and included as drivers in your policy.

  2. The coverage limits of the person who lends the car have been reached.

    In the case where the amount needed to repair damage from a collision exceeds your insurance policy's "limits"—that is, the maximum amount the policy will pay for repairs—then the driver's coverage policy might have to step in to cover what yours can't.

    Of course, this only applies to situations where the driver's coverage limits are higher than the car-lender's coverage limits.

  3. It's clear that you didn't give permission.

    If it's clear you didn't provide permission for someone else to drive your car and a collision occurs, then the driver's insurance would be responsible for coverage. This would of course be the case if your car was stolen and a collision occurred.

  4. We're talking about personal injury and medical expenses.

    In most cases, the driver's insurance policy will be the one to have to cover any personal injury (on the part of the driver) or medical expenses. However, if the passengers in the vehicle don't have coverage of their own, your policy may be liable for their medical expenses and personal injury.

A Final Note

Remember that all of the above only applies/matters if the driver you lent your car to is at fault in the collision. If the driver ins't at fault, you won't have to worry about your insurance taking a hit. You would file a claim with the at-fault party's insurance and receive coverage for any damages to your vehicle.

But also remember that the driver is uninsured and is at fault in the collision, you could be liable not only for damages to the car but also the damages to the other car (or cars) involved in the collision, in addition to all medical expenses of those injured in the collision.

That's why, whenever you lend your car out, it is essential to:

  1. Review your policy's coverage, including its limits and wording around driver permissions.
  2. Make sure the person you are lending your car to is covered and review his/her policy, as well.
  3. Only lend your car to people you know well and whom you know are safe drivers.
  4. Don't lend your car out for extended periods of time or for long, inter-state or international trips, as this will increase the odds of a collision and could change the coverage situation if the state's or country's rules are different from those of your own state/country.

No matter what you do in this situation, having a solid insurance policy is key.