Does Car Insurance Follow a Person Or a Car?
Car insurance can be complex and confusing. Most people wonder what situations their car insurance covers? Does it cover the car or driver? Does it only cover you when you're using your vehicle? Will it cover you in situations where you need to use someone else's vehicle or a rental?
What happens when you allow your child or a relative to get behind the wheel of your vehicle? Will your insurance coverage kick in during those situations? And will it cover them if they have an accident? And what if you have no health insurance and get hurt in an accident? What should a covered driver expect?
Before you hand over the keys to your car, you should learn which situations your car insurance policy will cover in the event of an accident. You can also find out which circumstances your insurance will cover if someone borrows your vehicle.
Let's take a closer look at how auto insurance follows the car as well as occasionally the person. After you learn the in's and out's of coverage, make sure to compare car insurance rates for free by entering your zip code on this page. You may be overpaying for your current policy.
Does Auto Insurance Follow the Car or the Driver? We'll Tell You!
Here is an overview of different car insurance options an insurance company will offer you and what they cover when you drive another person's vehicle under insurance laws.
Liability Insurance - Covers You
Uninsured Motorist Coverage - Covers You
Collision Insurance - Covers Your Car
Comprehensive Insurance - Cover Your Car
Medical Payments - Covers the Driver
Personal Injury Protection - Covers the Driver
Who Does My Car Insurance Policy Cover?
Your auto insurance policy will cover other people who drive your car when they're listed on your policy. They may include your spouse, relatives, parents, children, siblings roommates or other people in your household. There's also such a thing as permissive use, which means you allowed someone else to use your car so they are covered.
There is some insurance that may follow you or your vehicle. Your insurance carrier will determine which situations they will extend coverage. They take into consideration the following factors:
The people listed on your insurance policy
Your people in your residence
Whether you have permission to use the vehicle
Which Insurance Follows the Driver?
The following auto insurance coverage follows the car or the driver regardless of the vehicle they drive.
1. Liability Insurance
Every state requires liability insurance, except for New Hampshire. Liability coverage follows drivers regardless of the vehicle they use, provided it's an eligible situation under the policy.
Bodily injury liability pays for the other drivers' medical expenses
Property damage liability which pays for other drivers' vehicle damages when you have an at-fault accident.
Liability coverage protects the insured person when they operate a vehicle owned by another person. The coverage will generally extend to permissive use drivers, but not always. To see whether a person is am insured or excluded driver, look at the exclusions portion of your policy. Parents often exclude the teenage driver who raises rates, but that teenage driver may not be covered for an accident if driving a borrowed vehicle on your policy.
Is your car insured with lower liability coverage limits? Make sure you have adequate protection in case you or the person using your car cause an accident.
Study your auto insurance policy exclusions if you're unsure whether your liability insurance will cover an accident. Look closely at the policy language to be sure about coverage.
2. Medical Payments (MedPay) and Personal Injury Protection (PIP)
Med Pay and PIP coverage usually follows the driver instead of the vehicle. These bodily injury insurance coverages pay for the healthcare expenses of you or your passengers suffer in your car, regardless of fault in an accident. This coverage will also pay for injuries that you suffer in a rental vehicle, as a pedestrian, or while riding a bike. It is required coverage in some states.
Med Pay coverage is an optional coverage that pays for the injuries that you or your passengers receive in a car accident.
Med Pay coverage doesn't cover you if you're driving your car, but it can pay for your own medical bills if you're in a car accident while driving a rental car or if you're a pedestrian hit by a car while walking on the road.
3. Non-Owners Insurance
Do you borrow another person's vehicle often but don't own an actual vehicle? Consider purchasing a non-owner insurance policy. Does this insurance follow you? Yes, it also provides the minimum liability coverage required by your state. The policy will also cover any accident-related damages you cause while driving someone else's vehicle.
Find Out What Coverage is Right For You.
Situations Where Car Insurance Follows the Driver
There are some cases where car insurance follows the driver. It includes the following situations.
1. Car Rentals
Some carriers will expand your car insurance coverage when you rent a vehicle. It provides similar insurance as if you were driving your own vehicle. If you get into an accident in the rental car, your liability coverage will pay for another driver's accident-related expenses. In some situations, comprehensive and collision insurance will also pay for damages to the rental. Talk with your insurance agent to learn whether your insurance will cover rental car use.
2. Secondary Coverage
Primary insurance is the insurance that pays first on a claim. The insurance for your automobile is your primary coverage if a relative gets into an accident after borrowing your vehicle. If this relative has their own insurance coverage, it will serve as the secondary insurance policy after the primary policy reaches policy limits.
If your relative causes an accident that maxes out the limits of your insurance, your family member's liability coverage will cover the rest of the expenses. You may have sole responsibility for any damages that exceed your policy limits if your friend is uninsured.
When Does Insurance Follow the Car?
The following coverages don't follow the driver, only the vehicle. When you sign up for an applicable insurance policy, you must list the drivers covered under your policy. This insurance may not cover your damages if you allow another person to drive your car, even with permission.
1. Collision Coverage
Full coverage auto insurance policies usually include collision coverage. It pays for damages to your vehicle caused by a crash with another vehicle or object. If you weren't driving, your insurance policy must allow permissive use before it will cover any car repairs.
2. Comprehensive Auto Coverage
Comprehensive coverage pays when your car is lost or totaled due to vandalism, theft, natural disasters and other non-collision events. These claims generally don't involve a driver, unless a permitted driver hit an animal while driving your vehicle. Here, your policy would cover you for damages.
Situations Where Car Insurance Doesn't Follow the Vehicle
Car insurance doesn't follow the vehicle under the following situations.
1. Non-permissive use
As mentioned earlier, insurance carriers will never cover a person who drives your car without your explicit permission. What happens if this friend or relative causes an accident? The person is liable for all damages. It's difficult to prove that the person borrowed your car without permission, especially if they are a friend or relative.
2. Commercial Use
Your insurance company won't cover any damages when someone uses your vehicle for commercial or business-related purposes. These include ridesharing jobs and delivery services. Your insurance won't cover a permitted driver that has an accident while using your vehicle for delivery or concierge services. You will have to purchase a separate ridesharing policy to cover these commercial activities.
3. Excluded Drivers
Car insurance companies won't cover the claims of drivers you've excluded from your auto policy. If they have an accident while driving your vehicle, you will be financially responsible for any damages they cause. Depending on where you live, some states allow insurance policies to provide a minimum amount of coverage for excluded drivers.
4. Paid Car-Sharing
Do you allow other drivers to rent out your vehicle through a paid car-sharing service? If they have an accident while driving your automobile, your insurance may not cover them. You will have to purchase an additional insurance policy to cover their usage.
Unlicensed Drivers or Individuals with Suspended Licenses
Your auto insurance won't cover drivers who are unlicensed or have suspended licenses. If you allow this person to drive your car, you can both face criminal charges and fines.
What Happens If I Drive Someone Else's Car?
If you are listed on the car owner's insurance policy, you'll be covered while driving the car. So if you plan on making a habit of borrowing the car, ask the owner to have your name listed on the auto insurance policy.
If you're not on the policy you'll need the owner's consent to drive. Verbal permission is enough for you to drive the car and be covered under the owner's policy.
What Happens If Someone Else Drives My Car?
If the driver is listed on your car insurance policy driver, they can drive your car and be covered under your insurance. If their name is not listed on the auto policy, you will need to permit them to drive the car.
Giving them verbal permission will do the trick and you can even hand them the car keys yourself. With verbal permission, the driver will be covered under your car insurance. The same applies if you borrow a friend's car.
What Happens if I Rent a Car?
This is one instance where the car insurance follows the driver. Your car's liability insurance will follow you and cover a rental car. Your comprehensive and collision coverage won't cover the rental vehicle.
Advice for Sharing Vehicles
If you plan to share vehicles with another driver, you'll want to add your names to each other's auto insurance policies. It just makes sense. If you live with a roommate, they may need to borrow your car. If you have a relative, they may need you to borrow your car. So, make sure you add their names to your car insurance policy and make it official.
Select the people you add to your policy carefully, since you are entrusting them with driving your car. Are they trustworthy? Are they good drivers? You should consider excluding those with bad driving records because they can raise your car insurance rates.
Stick with family members and friends that you really trust. As for drivers, be on your best driving behavior when you are borrowing a car. Follow all the rules of the road, including the speed limit, and have the car returned to the owner at an agreed-upon time.
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