Does Car Insurance Follow the Car or the Driver?

It’s not an uncommon scenario: Your car is at the mechanic’s shop being repaired and your mother-in-law has offered her car to you until yours is road-ready again. Or you’re home from college for a visit and want to meet some friends, but you left your car on campus. In any situation, should you borrow someone else’s car or let someone borrow yours? Would you still be covered if you do? What happens if you or they are in an accident?

As a driver, there are times when you may find yourself in a position of driving someone else’s vehicle or lending your vehicle to someone temporarily. Regardless of the scenario, there are some things you need to know. Are you (and your vehicle) protected in case of an accident? Does your insurance follow the car or the driver?

Car vs. driver coverage

The answer isn’t so cut-and-dried. Insurance coverage varies from insurer to insurer and policy to policy, but generally, there are coverages that can follow you or your car. There are several factors that determine whether and to what extent a person or vehicle is covered, including the names listed on the insurance policy, the state where you live and whether you have the permission to drive someone else’s vehicle.

Does my car insurance cover other drivers who operate my vehicle?

Your car insurance typically will cover other drivers operating your vehicle if they’re listed on the policy. This may include your spouse or significant other, your parents, your siblings or your children. It also may include other household members.

For others not listed on your policy – like friends or extended family members – the issue becomes murkier. Whether the policy provides coverage in these situations typically depends on consent. If other people drive your car with your permission (meaning you’ve verbally told them they could drive your vehicle, or you handed them the keys), then typically they should be covered under the terms of your policy.

Drivers who are not on your policy might also be covered in the following situations:

• When extended family members visit you or stay with you at your home.
• When sharing the driving responsibility on a road trip or a long drive.
• When friends and family members borrow your car when theirs is being repaired.

There are a few scenarios in which certain drivers and activities will generally not be covered by your policy. These include:

Paid car-sharing

In most cases, your insurance will not extend to other drivers if they’re paying to use the car (for example, you’re renting it out to a car-sharing company). You will likely need an additional, specific auto insurance policy to cover this activity.

Excluded drivers

Excluded drivers (those specifically listed on the policy as not covered) will typically not be covered when driving a car under your auto insurance policy. In some states, excluded drivers may have a minimal amount of coverage, though this (and the exact type of coverage provided) will depend on where you live. You should check with your auto insurance carrier for guidance on this.

Commercial activities

If you use your vehicle for commercial purposes, your insurance policy will typically not cover incidents occurring during this type of use. This can include using the vehicle to deliver pizzas, driving for a transportation network company that offers car rides or ride-sharing, or operating some sort of delivery or concierge service. You will likely need a separate insurance policy or supplement to insure these types of activities.

Does my car insurance cover me when driving another vehicle?

If you’re specifically listed on the car owner’s insurance policy, you’ll be covered when driving that car – even if it’s not your own. If you’re not on the owner’s policy, applicable coverage will again depend on consent.

Assuming the driver gave you consent to operate the vehicle or, at the very least, there is reasonable belief that you had permission to drive it, then you’re probably covered. If you pay to drive the car (for example, you rent it from a rental car company or a car-sharing service), then this generally constitutes assumed permission as well.

Here are some situations in which you would typically be covered under your auto policy:

• Driving your parents’ vehicle with permission, assuming you are not listed as an excluded driver on their policy.
• Borrowing a friend’s or family member’s car with permission while yours is being repaired.
• Renting a car from a rental car company or the car-sharing marketplace.

Keep in mind that your full coverage might not extend to a rented or borrowed vehicle. Your liability coverage will generally extend to the car, but comprehensive insurance coverage and collision insurance coverage may not. The good news is that if you’re in an accident while driving a borrowed vehicle, there’s a chance the owner’s car insurance may provide some coverage. Again, you’ll want to check with your insurance agent to determine how you are covered and what your auto policy limits are. It might be a good time to inquire about other ways you can gain peace of mind with optional coverages like Accident Forgiveness and Minor Violation Forgiveness. These are optional features that can help you avoid a premium increase following your first covered accident or minor violation.

Tips for sharing vehicles

If you’re planning to regularly – or even just occasionally – share vehicles with another driver, then adding them to your auto policy (and vice versa) can help ensure that you’re both covered should an accident occur. You should also make sure they’re legally licensed (and that the license is not expired).

You might also consider supplemental insurance if you intend to use the car for commercial purposes or rent it out to other parties. This can help protect the investment you’ve made in the vehicle, as well as help protect you from liability.

Finally, always make sure you have direct permission from the owner before operating their vehicle. Driving someone else’s car without proper consent can pose a liability issue for both of you.

Every case is different

Because every auto insurance policy is different, the actual coverage you’ll have when driving a borrowed car (or lending one to someone) can vary greatly. It will depend on the exact terms of your policy, the state you live in, the driver in question and the type of loss suffered.

When it comes to your car insurance, there are coverages that can follow you as the driver, or your vehicle. That’s why having the appropriate car insurance coverage is so important. Contact your insurance agent to review your coverage and make sure you’ve got the protection you need.