Does My Car Insurance Cover Other Drivers? All You Want to Know

Does my car insurance cover other drivers? Your car insurance will protect another driver when you loan them your car.

Your policy will typically be the primary policy—pays out first—when you lend your car to a friend or relative. If the person you loan your car to also has insurance, that will pay out as secondary coverage, which means it will pay out after the primary coverage.

Regardless of whether you are driving a friend’s car or one that you are renting from a company, your policy will still provide you with protection when doing so.

Please read on for more detailed information.

Does Car Insurance Follow the Car Or Driver?

Car insurance follows both the car and the driver, but the policy associated with the car will usually pay out first.

Anyone operating your vehicle will typically be subject to your policy. Suppose, for instance, that your friend is injured in an accident while using your car. Your insurance will also protect you if you are operating a vehicle owned by someone else or a rental car agency.

This is true of the majority of coverage types, such as liability, comprehensive/collision, personal injury protection (PIP), and medical payments (MedPay).

If someone else wrecks my car, whose auto insurance policies take effect?

1. Your policy, tied to the car
2. The driver’s policy, tied to them
3. A policy belonging to the driver’s resident relative

Ordinarily, payouts from policies occur in the manner described above, moving to the next policy as the first one becomes exhausted. So if someone is liable for $25,000 of damage and you have $20,000 of liability coverage, the next $5,000 would come from their policy.

PIP/medical payments coverage is one potential exception, if you have it. The driver’s own PIP (or health insurance) may pay out first in some states.

Can someone else drive my car while I’m covered under my liability, comprehensive/collision, and PIP policies?

In general, all the main parts of your car insurance policy transfer to another person if you loan them your car, so long as they have your permission. This includes PIP/MedPay, Comprehensive/Collision, and Liability Protection.

• Liability coverage covers injuries to people and damage to property when you (or someone driving your car) is at fault in a crash.
• Collision and comprehensive coverage pay for damage to your car in a crash and any other cause, such as theft or vandalism. These two coverages pay out no matter who is driving or who was responsible for the damage.
• Personal injury protection/medical payments coverage pays for medical expenses for you or whoever was driving your car after a crash, in addition to passengers in your vehicle.

Note: For liability and comprehensive/collision, the policy that belongs to the owner of the car will usually go into effect first, with any additional coverages owned by the driver coming after, if necessary.

But for medical benefits (PIP/MedPay), the state that pays out first may differ. To learn how PIP/MedPay apply to a third-party driver, read your policy or contact your insurance provider.

How Does My Car Insurance Cover Other Drivers?

According to the Insurance Information Institute (III), your auto insurance would be regarded as the primary insurance in many states if another party were to wreck your car. In other words, the insurance coverage you’ve chosen would aid in paying for any injuries or car damage the other driver caused.

So, if someone else driving your car is at fault for the accident, here’s how your policy’s coverage may help:

• Auto liability insurance: This insurance may assist in covering the costs of another party’s accident-related injuries or vehicle damage. The medical expenses for your friend or the repairs to your own vehicle would not be covered by your liability insurance. How Much Does General Liability Insurance Cost?
• Collision insurance: If you have collision insurance, it might assist in covering the cost of your car’s repairs. Remember that you will first need to pay your deductible (the amount you are responsible for paying before insurance kicks in).
• In the event that the driver of your car sustains injuries as a result of an accident they caused, this coverage could assist in covering their medical expenses.

Additionally, it’s a good idea to be aware of a few potential exceptions to the way your insurance might operate. First of all, you shouldn’t automatically assume that your insurance will pay for the accident and any damage. For example, some policies don’t cover relatives living in your home, unless they are specifically named on your policy. Other policies might offer coverage, but only to a lesser extent. Second, you might not have to worry about your insurance being affected if it’s determined that the driver of your car wasn’t at fault for the collision. This is because the at-fault driver’s insurance may pay for your friend’s injuries and repairs to your car.

Remember that state laws differ, so it’s crucial to read your policy documents carefully to understand what’s covered. Ask your agent to explain any uncertainties you may have regarding your coverage and how it contributes to the safety of other drivers.

Can the Other Driver’s Car Insurance Become Involved?

If your insurance company will cover a permissive driver’s accident in your car, you may find that there are additional wrinkles. For instance, what if the accident caused extensive injuries or damage, and the cost of the claim maxes out the limits —the maximum amount your insurer will pay toward a covered claim —on your policy?

In this case, your friend’s car insurance policy may be tapped to help cover the remaining costs. Therefore, their policy might be used to cover the $5,000 discrepancy if your friend causes an accident that results in $15,000 in vehicle damage but your policy’s property damage limit only goes up to $10,000. Just keep in mind that this assumes that the driver of your vehicle is not an uninsured motorist.

Even if your policy limits are sufficient to cover a claim, it is still possible that your insurance provider will seek payment from the driver’s insurance. Your insurance company might settle the full accident claim and then get in touch with your friend’s insurance provider to try and recover some of the expenses. Whether this occurs will probably depend on the terms and conditions, coverages, and legal requirements of your state.

When Your Insurance Doesn’t Cover Other Drivers

Other drivers may not always be protected by your auto insurance. Anyone who doesn’t have permission to drive your car wouldn’t be covered by your car insurance (although it can be hard to prove when someone borrows your car without permission).

Your car insurance also won’t cover any excluded drivers (that means people who are specifically left off of your coverage).

Remember that excluded drivers are not allowed to operate your vehicle, and if they do, any damage they cause in an accident won’t be covered. In general, it makes sense to exclude someone from your coverage if adding them to it would increase your rates, such as if they have recently been charged with a DUI.

Additionally, anyone who uses your car is subject to the same insurance policies that apply to you when you’re behind the wheel. As a result, they wouldn’t be covered if they intentionally damaged your vehicle or engaged in illegal activity, such as racing.

Personal auto insurance also doesn’t cover other drivers if they use your car for commercial or business-related driving. That includes people who, among others, use your car for deliveries for their company or ride-sharing.

How Your Insurance Works With Another Driver’s

If someone with their own car insurance policy borrows your vehicle, then their insurance acts as secondary coverage in case of an accident.

That means that the other person’s policy would cover damage when the amount of damage from an accident goes past the limits of the primary policy — which is yours.

Here’s how this works: let’s say you have enough liability insurance to cover up to $50,000 for injuries. When you let your friend drive your car, they cause an accident that racks up $60,000 in medical bills for the other drivers. Your friend’s friend would be covered by your auto insurance, and their insurance would then step in to cover the remaining $10,000.

It’s possible that your car insurance would seek to recover some of the cost of damage that your friend caused by going after their insurance provider. This can happen even if you have enough car insurance to cover the entire cost of the accident.

If a friend borrows your car and gets into an accident that someone else causes, insurance works the same way for your friend as it would if you were in the accident. This implies that the harm they caused would be covered by the negligent driver’s insurance.

What is Permissive and Non-Permissive Use?

Okay, please bear with us. To further explain, it’s common for car insurance policies to include a clause about who has “permission” to use your car and who doesn’t. However, how these permissive driver laws are implemented varies between states.

It’s common for car insurance policies to include a clause about who has “permission” to use your car and who doesn’t. However, how these permissive driver laws are applied varies between states.

Let’s assume for the purposes of this example that your policy is exempt from the permissive use clause. Even if Aunt Carol wasn’t at fault, your insurance company could decline to cover her liability and medical expenses.

Contrarily, Carol would be protected if your policy includes a permissive use clause. We’ll examine each of these clauses in more detail now.

Permissive use is a clause within your insurance coverage that covers drivers who you give permission to drive your car. The permission could just be verbal. There is no requirement that it be recorded anywhere. Furthermore, these drivers don’t have to be household members or members of your immediate family. They may only be a close friend (or an aunt who lives far away). But you must first check your policy to see if a permissive use clause is present. It isn’t always covered by insurance policies.

Non-permissive use is when someone takes your car without your consent. This might be theft, but it might also take the form of a friend using it without your consent. If they cause an accident and are found to be at fault, their insurance will pay for their liability first, not yours. But you probably won’t escape being liable for some of the costs, either. Why? Because most insurers will take the view that, because you generally know this person, you did give permission—unless you specifically named them in your policy as someone not allowed to use your car.

• Who Are the Named Drivers?

Family members who reside in your home are named drivers under your auto insurance policy. It goes without saying, but you should always check with your insurer about who in your household your insurance covers. When you apply for auto insurance, the majority of insurers will ask you to list these individuals along with the regular users of your vehicle. Always tell your provider who you’d like to put down as a named driver in your policy— especially if that person uses your car regularly.

Things to Know Before You Lend Out Your Car

By now, it’s clear you should always check your insurance policy before letting someone else behind the wheel. Here are some other things to consider:

1. Does the person operating your vehicle have their own auto insurance?
2. Does the person driving your car live in a different state?
3. Is the driver’s license for the vehicle in your possession current?
4. Have you reviewed your policy to learn the specifics of the other driver’s coverage, including how and if they are covered at all?
5. When you loan your car, are the insurance and registration detailsin the glove box?
6. If someone else will be driving your car frequently, have you contacted your insurance company to add them as a named driver?

Bottom line: Before giving someone else the keys to your car, keep in mind all of the above. For instance, it might be safer to let your roommate drive on a road trip if she has insurance and a valid license than to let her uninsured friend from another state take the wheel at the next gas station.

FAQs

Summary: Does My Car Insurance Cover Other Drivers?

According to Nolo.com, the majority of auto insurance policies will cover any drivers you’ve given permission to drive your car or those whose names are on the policy. Accordingly, assuming they had your permission to operate your vehicle, your insurance will probably cover another driver in the event of an accident.

If you have any questions, please leave a comment. KV Auto tries to give you the best car industry information. Thank you for reading.

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