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Oftentimes, car insurance policies do cover other drivers when someone besides you is using your vehicle. But a number of factors impact whether or not a claim will be approved by your insurer, including what drivers are listed on your policy and whether the driver had permission to drive your car.
Learn more about when your car insurance covers other drivers and when you may be liable for any damage that occurs when someone else is behind the wheel.
Key Points
• Car insurance typically covers other drivers with permission, but coverage limits apply.
• The policyholder is responsible for the deductible and potential premium increases after a claim.
• Regular users of the car should be listed on the policy to ensure coverage.
• Non-permissive use, such as a stolen car, usually isn’t covered by insurance.
• Verify that the driver has a valid license and a good driving record.
Understanding Coverage for Other Drivers
Does car insurance cover the car or the driver when an accident occurs? In general, your auto insurance policy is attached to the vehicle. But certain factors could impact whether or not another driver is covered.
How Car Insurance Typically Covers Additional Drivers
Car insurance usually covers other drivers if they have the owner’s permission to drive the vehicle. Any drivers who live in your household should be listed on your insurance policy, especially if they regularly drive your car. Otherwise, you run the risk of having a claim denied.
Coverage may also extend to people who don’t live with you. For instance, family guests staying at your home or a friend who borrows your car with your permission may be covered under your policy.
Of course, there are exceptions to keep in mind. Coverage might not apply if you rent your car out to a car-sharing company or if the vehicle is being driven for a commercial use not included in your policy. The same holds true if your policy lists any excluded drivers, such as an elderly relative or someone in the household with a poor driving record.
The Distinction Between Liability and Collision Coverage
Even if another driver is covered by your policy, getting approved for a claim depends on what your car insurance covers. Two common types of policies are:
• Liability coverage, which helps cover damage to other vehicles and property as well as medical expenses if you’re at fault.
• Collision coverage, which helps cover damage to your vehicle only when you’re involved in an accident and are at fault.
Both collision and liability auto insurance come with a maximum dollar amount covered. You’re also responsible for your deductible, which is subtracted from the reimbursement funds you may receive from your insurer.
Factors That Influence Your Coverage Limits
Coverage limits typically aren’t impacted when you let other drivers use your car, but it’s important to understand how you (and others) are covered.
• State minimums: Most states require liability insurance with a minimum amount of coverage. For instance, $25,000/$50,000/$50,000 refers to the maximum coverage for bodily injury per person, bodily injury per accident, and property damage per accident.
• Cost of premium: You can get higher coverage on both types of policies, but your premium will likely cost more.
Recommended: How Much Auto Insurance Do I Really Need?
Permissive vs. Non-Permissive Use
Whether or not car insurance covers other drivers also depends on if they had permission to get behind the wheel. This distinction is called permissive vs. non-permissive use.
Definition of Permissive Use and Its Implications
Generally speaking, permissive use is exactly how it sounds: You’ve given permission to another driver to use your car. In many cases, this means your car insurance coverage stays with your car and any driver who has your permission.
The term becomes less clear-cut when a driver regularly uses your car but isn’t listed on your policy. That could be a family member, a roommate, or a babysitter who picks up your kids, so pay attention to how frequently someone actually drives your car.
What Happens with Non-Permissive Use
There are several examples of non-permissive use, which also have an impact on whether or not car insurance covers the driver or the car.
When your car is stolen, for example, you didn’t give the driver permission. If an accident occurs and that driver is at fault, you won’t be held liable. Instead, the thief or victim will be responsible for any damages. However, damage to your own car will typically only be covered if you carry comprehensive insurance.
Examples of Scenarios for Both Types of Use
Determining whether a situation qualifies as permissive or non-permissive use involves a number of factors and plenty of nuance. Here are two interesting examples that went to court for a final ruling.
Permissive use
One court case involved a daughter who had permission from her parents to drive her car. Her friends were not allowed to drive the vehicle. But after getting sick, she asked a friend to drive, who then got in an accident. This was interpreted as an emergency due to the sudden illness and was considered permissive use.
Non-permissive use
In another court case, a mechanic had permission to drive a customer’s car while repairing it. But he was in an accident while driving the car late at night with friends (without any repair work happening), so this was ruled non-permissive use.
Recommended: How Car Insurance Works
Whose Insurance Applies in an Accident?
When two parties are involved in an accident, the insurance used to cover the damage depends on who is at fault.
Your Policy: The Role of Primary vs. Secondary Coverage
When your policy is used to cover damages from an accident, your primary insurance policy will pay out first. You can get coverage up to the limit of each component of your policy, such as liability and collision.
Remember, however, that you’re financially responsible for your deductible. So if the claim reimbursement totals $5,000 and your deductible is $500, you’ll only receive $4,500 from your insurance company.
Secondary coverage covers any eligible damage that goes beyond your primary coverage. Examples of secondary insurance include:
• Supplemental liability coverage
• Rental car insurance
• Health insurance applied to accident-related injuries
How Insurance Claims Are Processed with Multiple Policies
When you have multiple policies and someone else is driving your car, your primary policy will go into effect first. Any relevant supplemental policies will be used next, including the actual driver’s own car insurance policy.
But if the driver of another car is found at fault, their insurance coverage should pay for any damage or medical bills, even if someone else is driving your car.
If the driver of your car didn’t have permission, they will likely be liable for any damages that were their responsibility.
Situations That May Complicate Liability
One issue that can complicate liability is if you allow an uninsured driver to use your car. Your policy may still cover damages up to the policy limits, but that driver could also be liable for damages beyond your maximum coverage.
Need a refresher on how car insurance works? Consider checking out our auto insurance guide.
Things to Consider Before Allowing Others to Drive Your Car
Is it worth letting someone else drive your car? Here’s what to think about.
Potential Risks of Lending Your Vehicle
These are some common risks involved with letting someone else drive your car:
• Your insurance premium could increase after the claim.
• You’ll be responsible for the deductible.
• The claim could be denied if the other driver frequently uses your vehicle.
• You could be responsible for camera-enforced tickets .
Insurance Implications for Accidents Involving Other Drivers
When someone else is driving your car and gets into an accident, you’re responsible for the claims process. You must also pay your deductible, and as previously mentioned, your annual premium could go up.
Best Practices for Sharing Your Car Safely
Before you let anyone else drive your car, get the facts in order. Find out details around the driver’s license status, driving record, and age.
Also consider the condition of your car, as well as the weather conditions in which they’ll be driving. If you’re loaning your car to a new driver, for example, you may want to think twice if rain is in the forecast.
The Takeaway
If you’re considering loaning out your car to a friend, you may wonder, Does my car insurance cover other drivers? Typically, it does, but there are several factors that could impact whether your insurance company will approve a claim in the event of an accident. Before you decide to loan out your car, it’s a good idea to review your policy terms or talk to your insurance agent.
When you’re ready to shop for auto insurance, SoFi can help. Our online auto insurance comparison tool lets you see quotes from a network of top insurance providers within minutes, saving you time and hassle.
FAQ
What happens if a friend crashes my car but they have their own insurance?
First, your own insurance will likely serve as the primary insurance to pay out any damages. If the damage exceeds your policy limits, your friend’s car insurance could kick in to cover the difference.
Am I covered if I get into an accident while borrowing a friend’s car?
It depends on the situation. Assuming you have permission to use the car and are not a frequent driver of their vehicle, you could be covered up to the limits of your friend’s insurance policy.
Do I need to add my roommate or a family member to my policy?
If your roommate or a family member regularly uses your vehicle, you should consider adding them to your policy.
What is an “excluded driver” on a car insurance policy?
An excluded driver is a specific individual listed on your policy who is not allowed to drive your vehicle. It could be someone in the household with a bad driving record (such as a DUI), or an elderly relative who is no longer allowed to drive.
Will my rates go up if someone else has an accident in my car?
Yes, it is possible that your rates will go up if someone else has an accident in your car. However, there may not be an impact if the driver of another vehicle was at fault.
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