Does Car Insurance Follow the Driver?

Many believe that if a driver is in an accident in someone else's car, the driver's insurance would cover the damages rather than the car's owner. But this is a myth; the car insurance follows the car instead. The owner of the car is liable for damages and a possible increase in premiums as a result of the accident and claim. Because of this, car owners need to be wary of who they lend their car to.

No matter how long you lend your car for, keep in mind you’re also lending your insurance policy. Your insurance acts as primary coverage whenever you grant a non-excluded driver permission to drive your car. That driver’s insurance may come into play, but it is secondary to your coverage until your insurance reaches its limits. The permitted driver’s insurance may also only cover personal liability and medical expenses. If the permitted driver does not have insurance, you are liable for all damages.

If the permitted driver gets into an accident that wasn’t his fault, you likely won’t have to use your own insurance. Instead, you would file a claim and the at-fault driver’s insurance provider would be required to cover costs.

Granting Permission

Because car insurance follows the car, anyone with permission to use your car is covered by your policy if they are at fault in an accident. In some states, however, the drivers you permit to use your car may have reduced coverage.

If someone takes your car without permission, and is at fault in an accident, you aren’t initially held financially responsible for the other driver’s injury or property damage. Instead, the unpermitted driver’s insurance is usually considered the primary coverage and yours is secondary. This could mean you would be responsible for any damages or medical costs that exceed the driver’s insurance limits.

If a friend driving your car is uninsured or underinsured, you may have to make a collision insurance claim on your own policy. If you only have liability coverage, you may have to pay out of pocket for damages to your car.

When it comes to drivers not having explicit permission to use your car, you may still be held liable, particularly if the driver is someone you know. The insurance company may assume that driver had permission, even if you didn’t give him the keys.

Excluding Drivers

Car insurance companies allow you to exclude specific drivers from your insurance policy, though a few states, including Kansas, Michigan, New York, Virginia, and Wisconsin, do not. Drivers you exclude may be your teenage child or a family member with several accidents, DUIs, or a poor driving record, as excluding these drivers can help you save on your premium.

Does car insurance follow the driver if he is excluded from the policy?

If an excluded driver uses your car with your permission and gets in an accident, both you and the driver are held responsible. An excluded driver who takes your car without permission and gets in an accident may be financially liable instead of you, depending on the laws in your state.

If you live in a no-fault state, personal injury likely falls under the excluded driver’s insurance, but both of you may be responsible for personal liability. If the excluded driver’s insurance reaches its limit, the other driver could take both of you to court to cover the remaining expenses.

No matter how long you lend your car for, keep in mind you’re also lending your insurance policy.

Have the Right People on Your Policy

If other members of your family are allowed to drive your car, you likely already pay insurance for them. That way, if they use your car and are at fault in an accident, they would already be covered under your policy.

If you regularly lend your vehicle to a friend or family member, or you plan to lend your car to someone for an extended period of time, you should consider adding that person to your insurance policy so damages are covered by your insurance. That way, in the case of an at-fault accident, you are not personally held responsible.

Before Lending Your Vehicle to Anyone

Before letting anyone else drive your car, check your policy for all related details, including any terms, conditions, or restrictions. Ensure your friend has a valid drivers license and that he has his own insurance policy. Make sure your registration and insurance information are always in your car.

If you often lend your car to other drivers, or are considering doing so, make sure your policy is going to keep you protected. Call us today and let us help you review your options and possibly find a plan that protects you.