Will my Insurance Cover an Accident if I’m not Driving the Car?
Sometimes a collision occurs in your vehicle when you are not the person behind the wheel. Maybe your son pleaded for you to let him take your new car to drive his girlfriend to the dance. Maybe your sister needed to borrow the car because hers was in the shop. Or maybe your girlfriend who just moved in didn’t have a car of her own at the moment, and you let her drive yours to work.
Despite the best of intentions, sometimes accidents happen. And if it was your son, sister or significant other behind the wheel, how do you know whether your insurance policy will cover the damage?
The car or the driver?
As a general rule, car insurance for the vehicle itself is usually tied to the vehicle. While the policy holder’s name is on the insurance agreement, there is a declarations page listing the individuals to whom coverage applies and the vehicles covered under that policy. Thus, if you gave valid permission to use your car to a licensed driver, your insurance will likely cover the damage, even when that person is not listed on the policy. In the unfortunate situation where there person you entrusted your car to does not have insurance, your policy may apply thereby protecting both the driver and you from personal liability
Again, that is the general rule. Keep in mind that every jurisdiction and every policy may be different. Trade industry publication Claims Journal likens it to “a MENSA puzzle” to figure out whether insurance follows the car or the driver in some cases, depending on the policy, state, and jurisdiction where the accident happened.
Liability coverage, which is required in every state in the U.S., should always follow the driver. Thus, if your son or sister drove your car, they should have done so while maintaining liability insurance coverage. If a collision happened while driving your car, their own liability insurance should be a first line of defense that may also prevent you from liability and from your own policy covering the damage. Comprehensive and collision insurance, which are not required but which many drivers have, follow the vehicle from driver to driver. However, according to Claims Journal, it can get confusing when the vehicle owner with the insurance allows someone else to drive their car. Some policies allow for permissive use of vehicles, while others do not. Make sure to check your policy before letting another
driver use your car. And, always make certain that the driver has his or her own insurance coverage. If they do not, your coverage will apply and you could face a lawsuit for negligently entrusting your car to someone not safely able to do so.
Names on the Policy
Some insurance companies will require that you list on your policy as “Insureds” everyone in your household, be they spouse, child, aunt or other relative. They are statistically likely to drive your car at some point. Even if you and your spouse or significant other have separate auto policies, if you’re living together, insurance companies will take that into account because they consider the driving histories of all family members in a household while underwriting policies, according to online insurance company Esurance.
Children can be covered by their parent’s car insurance policies until age 26. If a child is learning to drive under a learner’s permit, it is best to check with your insurance agency to see if he or she has to be named specifically on the auto policy or if your policy will cover that driver, according to insurance company Allstate. Such restrictions apply as insurance companies recognize that newer drivers tend to get into more accidents.
Talk about it first
The Gorny Law Firm strongly recommends having a serious discussion with a person before letting them drive your car. Make certain they have a license. Verify that they have insurance and find out the limits of their policy. If they maintain minimum insurance limits, your chances of having to pay damages above that coverage increases. And, do not be afraid to ask the person about their driving history. If they lie to you and tell you they have never been in a collision, you minimize your chances of being sued for negligent entrustment.
And, importantly, don’t be afraid to ask if the person has taken medication or ingested alcohol or drugs. If you allow an intoxicated person to drive your car, you are at serious risk of bearing as much responsibility for a collision as the driver.
Certainly, these are critical safety issues. But, taking these actions will help to minimize collisions and to keep your rates down. A collision in your car, whether you are behind the wheel or not, will result in you paying more for insurance or being dropped by your carrier.
