Does my Auto Insurance Cover Other Drivers?
Car sharing can be a great way to conserve fuel and extend your resources out to friends and family. However, it’s important to know exactly how to process insurance and damages in the unfortunate event of an accident.
Before lending out your car to anyone, you should have comprehensive answers to the following questions:
- Does my auto insurance cover other drivers?
- What types of auto insurance do I currently have?
- Do I live in a state with limitations?
In this article, we will guide you through answering these questions properly to keep you and your family safe. Let’s get started.
1. Does my auto insurance cover other drivers?
You’ll hear a lot of mixed information debating whether or not auto insurance follows the car or the driver but in general, most types of auto insurance follow the vehicle. That means that if you lend your car to a family member or a friend that you’re also lending your car insurance.
Note that this does not apply if your family member is already on your insurance policy—even if the driver is not the primary owner of the vehicle, they are still given the same amount of coverage as long as they are explicitly stated and paid for on your auto insurance policy.
It is important to report new drivers within your household to your insurance company as soon as possible, as teen coverageis calculated at a different rate than the adult, more experienced drivers.
However, if your family member or friend is not on your policy then they are essentially using your personal insurance policy parameters.
Some exclusions do apply and certain types of insurance will follow the driver and not the car though.
Let’s breakdown exactly what types of insurance will follow the vehicle versus the driver and vice versa.
2. What type of auto insurance do I currently have?
Make a point to call your insurance provider to breakdown exactly what types of insurance you have or don’t have. We’ll give a generalized guide here, but every policy is as unique as the family it serves.
As you’ll see shortly, insurance regarding damage to the car generally follows the vehicle, while some personal injuries will transfer from driver to driver. Here is the exact breakdown for auto insurance vehicle/driver coverage:
Follows the Vehicle
For clarification, these are the types of plans you would typically cover should you lend your car out to another driver.
- Collision: Collision insurance refers to damage to your car. Note that regardless of your coverage amount, you may be liable to pay for a deductible depending on your policy. Moreover, if you’re past your predetermined collision limit, you may be subject to paying out of pocket for any additional repairs.
- Comprehensive: You might have some sort of comprehensive, sometimes called “full coverage”, insurance. While this sometimes encompasses damages from collision, it may also cover damages to your car under separate circumstances.
- Liability: This insurance type refers to the damage to the other party’s car or medical bills. Even if you were not driving, this insurance extends out to the current driver of your car.
Follows the Driver
These are the types of insurance that will transfer from person to person, or costs you may not be liable for if you loan your car to another individual who is not explicitly part of your insurance policy.
- MedPay or PIP: Medpay or Personal Injury Protection refers to personal injuries brought on by an accident. Note that MedPay or PIP is required in some states.
- Liability: If the liability costs exceed your limit, your friend may be able to extend their insurance policy to cover the remaining costs depending on their policy.
3. Do I live in a state with limitations?
While all insurance is unique, you should inquire specifically about the limitations within your state. In general, note that some states require you to have MedPay or PIP type insurance. Moreover, most states allow excluding drivers on your policy, although there are a few exceptions.
This is important because by giving verbal authorization of the use of a vehicle to a family member or friend, it entitles them to the usage of your insurance policy. Should they be excluded explicitly from your policy, this changes the equation entirely.
Hopefully, this guide gave you an introduction to deciphering your personal insurance policy. While most coverage generally follows the vehicle, it’s important to clarify with your particular policy provider to ensure the safest experience possible.