Does my car insurance cover me if I drive someone’s car or someone drives my car?

February 10, 2017

Many of us have been in a situation where we have either loaned or borrowed a car from a friend, roommate or family member. But what happens in these situations if a car accident is involved? This is when it gets a little more complicated. Let’s break up the two situations and take a look at what happens in each.

Someone Else Drives Your Vehicle

First, lets look at the situation where you are lending a car. Although auto insurance policies will vary, the general rule of thumb is that anyone living in your house is typically covered when driving your car unless they are specifically excluded in the policy. In many cases, it is actually required for everyone in the same household to be included on the vehicle’s insurance policy. So this means that your family that you live with will be covered under your policy.

What about friends and family members who don’t live with you but borrow your car occasionally? They will be able to borrow your car under permissive use, which basically means that if you give another driver permission to take your car, they will be covered by your car’s insurance coverage. Keep in mind this means that YOUR policy provides the primary coverage, not their policy.

For example, let’s say you let your roommate, Rachel, borrow your car for the day. Rachel is in a hurry on her way home from work and accidentally rear-ends a driver in her office’s parking lot. In this case, your liability coverage would be the primary coverage that would pay for the damages that occurred.

What this means is that you would have to file the claim with your company and pay the deductible. Keep in mind that the accident may also affect your insurance costs and that you will have to accept any increases in rates that result from this event. If the damages exceed your limits, Rachel’s insurance coverage will step in as a secondary coverage to assist with the payments.

What if Rachel still got into an accident, but it wasn’t her fault. In this case, the claim would be paid by the coverage of the driver at fault and there would be no effect on your insurance.

A good way to think about this is that car insurance follows the vehicle, not the other way around.

You drive someone else’s vehicle

Now, let’s look at a situation where you are borrowing a car from a friend or relative. In most circumstances, if you get into an accident, your friend’s automotive policy will provide the coverage. This is because in most states auto policies are attached to the car, regardless of who is driving it. As long as you have the owner’s permission to use the car or vehicle, their policy will cover you.

Your auto insurance policy will act as a second coverage in the case that the costs exceed your friend’s limits. Anything not covered by the primary insurers (your friend’s policy) will be covered by your policy. If you don’t have your own insurance and you borrow a car from a friend, you may be personally liable for any damages that occur in an accident, especially if your friend has skimpy insurance coverage. If you would like, you have the option to purchase a non-owner policy that would name you as the primary driver but would not attach the vehicle to your policy. This will allow you to use a non-owner policy as a secondary coverage the same way as your auto policy would if you had one.

Keep in mind that the owner’s insurance only extends to occasional use by other people who are not listed on the policy. If you plan to frequently borrow a car such as three or four times a week to get to work, or borrow a car for an extended period of time such as for the summer, the car’s owner may need to list you on their policy as a driver.


Contributor: Smruthi Sriram
All images from Google