Over the years people have come to me with many car questions. Renting or loaning cars has come up often.
The question goes like this: “Does my insurance cover a friend if I lend or rent my car to them?” and “Am I covered if I drive someone else’s car?” and “Does My Insurance Cover Other Drivers?”
The question of allowing other drivers to drive your car and whether they will be covered by your existing auto insurance is critical. Individual policies vary so you need to speak to your agent regarding the policy limitations.
In short, there are risks to the exchange that, if an accident occurs, you are the one that is saddled with the long term increase in premiums. You can compare this situation to someone “borrowing” your credit card. Whatever happens while that person utilizes your good name and your good standing will stay on your record for many years and could cost you extra money during that time. It is the same with car insurance. Whatever happens while they drive your car under your policy will stay on your record and as a result could increase your premiums in the event there was an accident. It happens. That is the risk you take. Regardless, if you do decide to go forward with it, talk to your agent and get the proper coverage.
When you speak to your car insurance agent, you should ask who precisely is covered and what happens if you give permission to someone (whether borrowing or renting), and there happens to be an accident. If you have complete coverage, many insurance carriers will cover the driver, but only at the minimum coverage limits. However, there are certainly insurance carriers who will not cover any driver who is not specifically named in the policy.
An important factor can be if that person resides at your home and if they are directly related to you. In general, if someone is living in your household and they regularly drive your car, then the insurance carrier expects you to have that person named on the policy. They will need to undergo the same qualification process as any other policy holder.
In some cases, if a family member is visiting and has permission from you to drive the car, then the insurance company will cover them if there is an accident, but the coverage may be limited. Additionally, in the future, that person may be specifically excluded from any future inclusion on the policy and your rates may increase as a result of any accidents.
Once you put someone on your policy (as a family member), it can be difficult to remove them. That could be a problem if they are in an accident at a later point, unrelated to your car, but still your rates rise as a result.
Driving Someone Else’s Car
Are you covered or do you need to get coverage?
If you carry auto insurance for your own vehicle, when driving another car, typically you are covered by your own policy in the event that you get into an accident. Certain factors may be weighed including the reasons for driving a car other than your own (if you did not have permission you will certainly not be covered).
With comprehensive insurance, which covers almost everything, it is the car rather than the driver that is covered. This, however, requires many stipulations to be put in place such as who is allowed to drive the car. If you are driving a car with this type of insurance and if you are not listed as a driver–even if you have permission–you may not be covered in an accident.
Under normal circumstances, provided the car you are driving is insured or you carry insurance for your own vehicle, an accident will be covered. Since comprehensive insurance follows the car, the insurance covering the car you are driving (with permission) will cover at-fault accidents. If the car has no insurance attached to it but you do have insurance, then your insurance will most often kick in and cover you. It is a complicated situation, but provided you have permission to drive another car and you have insurance, you will be covered in the event of an accident. The best thing to do, however is to check the exact stipulations of yours or your friend or family member’s insurance company.
