In the United States, if you lend your car to someone (occasionally and with your permission) and have an accident, your insurance coverage will likely be responsible for the claim, depending on the coverages in your policy. However, the claim will remain on your insurance record and could affect the cost of your insurance premium in the future.
Here we will explain the various factors that influence this situation and try to solve some of the frequently asked questions on the subject.
How does my auto insurance cover, other drivers?
In many states, your auto insurance is considered primary insurance if someone else has an accident in your car. This means that the coverage you have in your policy helps cover personal injury or damage caused while the other person is driving.
If the person who was driving your car is to blame for the accident, these are the coverages that could help you:
- Bodily Injury and Property Damage Liability – These coverages can help pay for third-party medical or property damage expenses that resulted from the accident. This coverage will not pay for the driver’s medical expenses or repairs to your car.
- Collision: If you have collision coverage, this can help pay for repairs to your car, but you will have to pay your deductible.
- Medical Payments or Personal Injury Protection: If the vehicle driver is injured in an accident caused by them, this coverage can help pay for your medical expenses.
It’s also good to understand the exceptions to how your insurance works. First of all, you should not assume that your insurance will cover the accident and any damages. For example, some policies do not protect anyone else who is not explicitly listed on your policy. Other policies may provide you with coverage but on a more limited basis.
Second, if the driver of your car is not at fault for the accident, chances are you won’t have to worry about your insurance being affected. Usually, the at-fault person’s insurance will pay for the damage to your car and the driver’s medical expenses.
Remember that the laws are different in each state, so it is essential to read all of your policy documents to understand what is included in your policy thoroughly. If you have questions about your coverage and how it helps protect other drivers, ask your auto insurance agent.
What are permissive use and non-permissive use?
If someone else is in an accident with your car, your auto insurance coverage may depend on whether or not you permitted them to use your vehicle. This is called permissive use or non-permissive use.
- Most car insurance policies cover drivers you’ve signed up for your policy or anyone you’ve permitted to use your car. This means that your auto insurance will most likely cover another driver in the event of an accident if you allow them to use your vehicle. Just be aware that some policies give you reduced coverage when other people are driving your car.
- If a friend or family member takes your car without your permission, you (and your insurance) may not be responsible for the damage if there is an accident. For example, if a friend drives your car without telling you and causes an accident, that person’s insurance is considered the primary coverage – not yours. However, if your friend does not have insurance, you may have to file a claim. On the other hand, if a thief steals your car and crashes it, you probably won’t be responsible for damages and repairs to the other vehicle. But you will have to make a claim with your insurance company to cover the damage to your car.
Be sure to read all the terms and conditions of your policy or talk to your agent to understand what is covered in your state. You can also talk to your agent to determine who you want to add or exclude to your policy.
So does this mean my car insurance extends to anyone I lend my car to?
No! This does not mean that anyone can benefit from her insurance coverage, as long as you drive her car with her permission from her. Remember, the insurance company expects certain people, especially household members, to be included in the policy or explicitly excluded.
You must list all regular drivers and access to your car on your auto insurance policy. This includes everyone who lives in your home and people who drive you regularly. If some people live with you who are not going to drive the car, they should be excluded, this may help you lower your cost, but if that person drives the vehicle, the insurance will not provide coverage.
What should drivers without a car or auto insurance consider?
If you’re a licensed driver without a car, you probably don’t need a long-term auto insurance policy. But what can you do if you temporarily need to use a loaner car? Here are a few things you should keep in mind:
- Auto owner’s insurance can help provide coverage if you are in an accident.
- You may be liable for certain types of damage depending on the car owner’s coverage. For example, if the policy does not include collision coverage, you will have to pay for damages if you cause an accident.
- You may be responsible for expenses that exceed the car owner’s coverage limits.
If you are thinking of lending your car to a friend or relative or are thinking of borrowing a vehicle, it is recommended that you both review your auto insurance policy first. Your insurance agent can help you answer any questions you may have before deciding whether to lend your car.
All drivers must have auto insurance. There are many reasons, and it’s a wise investment in your financial stability that can save you and your family expensive expenses in the future.