Most people have faced this dilemma at some point. Someone else wants to drive your car. But, you don’t know if it’s a good idea, insurance-wise. The dilemma brings up many car insurance FAQs such as: “Does my car insurance pay if someone else is behind the wheel?” or “What happens if there’s an accident?”
It happens to everybody who owns a car. Your brother needs to use your car for a weekend fishing trip. Or, your friend wants to use it to run to WalMart. You want to be helpful, but you don’t want to put yourself in a sticky situation with your insurance.
Generally, car insurance follows the car, not the person driving the car. That may seem confusing, but look at it this way. If someone borrows your car with your permission, they are also “borrowing” your insurance.
So, to avoid any unpleasant or expensive complications, learn all you can about your car insurance coverage before handing over your keys.
Car Insurance and Occasional Drivers: Know the Facts
If you loan someone your car and they have an accident, what can you expect to happen? In most cases, if the person is driving with your consent, it’s not a problem. According to the Insurance Information Institute:
“Generally, it’s not a problem if they’re driving with your consent,” says Jeanne Salvatore, Senior Vice President of Public Affairs and consumer spokesperson for the Insurance Information Institute. “If it’s an occasional use, say I borrow your car to go pick up milk, and as long as permission has been verbally granted, you’ll typically be covered.”
However, some circumstances may not be as straightforward. Contact your insurance agent before loaning someone your car if you’re unsure about what is covered.
Does My Car Insurance Cover Other Drivers?
In some states, your car insurance is the primary coverage if someone else has an accident while driving your vehicle. It would help pay the costs of vehicle damage or personal injuries caused by the driver.
For example, if your brother is at fault for an accident while driving your car, here’s how your insurance works:
- Liability Coverage – Helps pay for another person’s medical bill or vehicle damage. However, it would not cover your brother’s medical bills or repairs to your vehicle.
- Collision Coverage – Helps pay for repairs to your vehicle after you’ve paid the deductible.
- Medical Payments Coverage – If the person driving your car is injured in an accident they caused, this coverage may help pay their medical bills.
Keep in mind that each state has different laws. Read your policy carefully or talk to your agent to clarify what is covered in your state. Furthermore, in some states, insurance only provides reduced coverage when someone else drives your car.
Another important thing to remember is that drivers who live in your household must be listed on your insurance policy.
What is the Difference Between Permissive and Non-Permissive Use?
Your insurance company’s willingness to pay if another person drives your car and causes an accident. It mostly depends on whether you “gave permission” for them to use your vehicle. In insurance jargon, this is known as “permissive” or “non-permissive” use.
- Permissive Use – According to Nolo.com, insurance companies will likely cover another driver if they did indeed have your permission to use your car.
- Non-Permissive Use – If someone uses your car without your permission, you may be off the hook for damages in the event of an accident. In this situation, the primary insurance coverage will be the individual’s policy. Further, if someone steals your car and causes an accident, you are not responsible for damage or repairs to the other car. But, you may have to get your insurance to cover repairs to your vehicle.
To protect yourself, one option is to talk to your agent about excluding specific individuals from your policy.
Can the Permissive Driver’s Insurance Help?
Although your insurance will cover a permissive driver, what if the costs of an accident exceed your coverage limits? For example, the accident causes extensive damage that maxes out what your insurance company will pay.
In this scenario, the permissive driver’s insurance may cover the remainder of the costs. Of course, this is assuming the driver isn’t uninsured. It’s also possible your insurance will cover the entire costs, but will seek reimbursement for the other driver’s insurance. State laws and your insurer’s terms and conditions will determine whether this can happen.
Sandifer Insurance Will Make Sure You Understand Your Car Insurance Coverage
Letting someone else drive your car can be risky for several reasons. Before you hand over the keys, contact Sandifer Insurance Agency. We will review your coverage and help you understand the terms and conditions of the policy.
Our purpose is to make sure you have adequate coverage for your automobile, home, life insurance, or business. If you have car insurance questions about your insurance or need to upgrade your policy, we are happy to help Reach out to us by phone, email, or online to speak with one of our agents or to get a free quote.
- iii.org/article – 8 Questions to Ask Before Buying Auto Insurance