If you’re planning on having a friend get behind the wheel of your car (hello, summer road trip!), what’s the deal with your car insurance? Is this other driver covered?
Good question. As we’re about to explain, it depends on the coverage you have and who’s at fault if there’s an accident. And (you guessed it) there are exceptions and speed bumps to know about before you hand over the keys!
We’ll try to make it as simple as possible. Let’s take a look at how car insurance comes into play when someone else is putting the pedal to your metal.
Can Someone Drive My Car and Be Covered Under My Insurance?
In your car insurance policy, your car is covered by the comprehensive and collision coverage and you are covered through your liability and any medical coverage.
In most states, the insurance company will pay to cover repairs to your vehicle regardless of who is driving.1 But when insurers look at the person behind your wheel and the other car involved in the collision, things become less black and white. It can depend on the terms of your coverage, your policy and the state where you live.
Do you have the right auto insurance coverage? You could be saving hundreds!
Bottom line: Look carefully at the fine print of your policy before you let someone else drive! Whether or not they live in a different state, the other driver should be doing the same.
Now, let’s look specifically at how liability, comprehensive and collision coverages can affect things when someone else is driving your car.
Liability Covers the Other Car
Liability coverage is mandatory in pretty much every state except New Hampshire. It’s there to cover the costs if you’re at fault in an accident along with the other driver’s medical and repair costs.
But will it help if your Aunt Carol visits from out-of-state, drives your sedan one morning, and gets into a minor scrape (for which she’s at fault)? Let’s take a look:
- Because Aunt Carol was at fault, your liability insurance will help pay toward repairs and medical costs for the other driver. Liability will also cover your legal bills in this situation.
- Your liability coverage won’t pay for Aunt Carol’s medical costs if she’s at fault. If Carol has her own insurance, her liability could help with her medical costs and support your liability if you reach the limits of your policy.
- What if Aunt Carol doesn’t have any car insurance at all? Take a deep breath. Because if Carol was at fault, you’ll very likely face all the costs to cover the repairs to the other car and the other driver’s medical bills.
Let’s turn this around and pretend the other driver is at fault. In that case, neither you nor Aunt Carol need to worry because the other driver’s liability coverage will pay for your repairs, legal costs and Carol’s medical bills. That’s unless you live in a “no-fault” state. (More on that soon.)
Bottom line: Liability will help cover any damages to other vehicles. This goes without saying, but make sure you never let an uninsured driver behind the wheel of your car.
Collision and Comprehensive Cover Your Car
Now, if your car insurance policy includes comprehensive and collision coverage (and we recommend you have both in place), this pairing will help pay for repairs to your car—even if, like in our example, Aunt Carol was driving.
If your car insurance policy includes comprehensive and collision coverage (and we recommend you have both in place), this pairing will help pay for repairs to your car.
But here’s where the gray areas creep in. Because you weren’t driving your car, your policy might not pay out as much for the repairs. Let’s say the repair costs exceed the total your policy allows. Your insurance company could turn to Carol’s insurance provider to make up the rest.
Even if you don’t reach or exceed your limits, your insurer could approach Carol’s provider to recoup some of the costs anyway. After all, she was driving! Again, it’s all in the fine print.
What Is Permissive and Non-Permissive Use?
Okay, hang with us here. To further explain, it’s common for car insurance policies to include a clause about who has “permission” to use your car and who doesn’t. But states vary in how they apply these permissive driver laws.
It’s common for car insurance policies to include a clause about who has “permission” to use your car and who doesn’t. But states vary in how they apply these permissive driver laws.
In our example, let’s pretend your policy doesn’t have a permissive use clause in it. Your insurance provider could refuse to pay toward Aunt Carol’s liability and medical costs—even if she wasn’t at fault.
On the other hand, if your policy does have a permissive use clause, Carol would be covered. Let’s take a closer look at these clauses in detail.
Permissive use is a clause within your insurance coverage that covers drivers who you give permission to drive your car. The permission could just be verbal. It doesn’t need to be written down anywhere. And these drivers don’t need to be members of your immediate family or live in your household. They could just be a friend (or a distant aunt). But you must look at your policy first to see if there’s a permissive use clause in place. Not all insurance policies include it.
Non-permissive use is when someone takes your car without your consent. This could be theft, but it could also happen if a friend uses it without your permission. If they get into an accident and they’re at fault, it’ll be their insurance coverage that covers their liability first—not yours. But you probably won’t escape being liable for some of the costs, either. Why? Because most insurers will take the view that, because you generally know this person, you did give permission—unless you specifically named them in your policy as someone not allowed to use your car.
Who Are Named Drivers?
Named drivers within your car insurance policy are members of your immediate family who live in your household. It goes without saying, but you should always check with your insurer about who in your household your insurance covers. Most insurers will ask you to list these people along with regular users of your car when you apply for car insurance. Always tell your provider who you’d like to put down as a named driver in your policy— especially if that person uses your car regularly.
When Is Someone Not Covered by My Car Insurance?
Most states will allow you to exclude specific named drivers from your policy. This could be someone in your family whose driving record isn’t great or has a few accidents to their name. By excluding them, you protect your own insurance premium from going up.
But what happens if they ignore this exclusion and use your car? And, worse still, what if they damage it? Your state’s laws could come into play at this point. But, as a general rule, your insurance provider won’t pay out if the excluded driver uses the car without your permission and causes damage.
What Happens in a No-Fault State?
Things can change when you’re talking about excluded drivers in a “no-fault” state like Florida. In that case, your policy will pay to cover your repairs and damage regardless of who’s at fault.
But if you live in a no-fault state and the person at fault for an accident is an excluded driver, you could both be called upon to pay costs to the driver who wasn’t at fault if they reach their coverage limit.
Things to Know Before You Lend Out Your Car
By now, it’s clear you should always check your insurance policy before letting someone else behind the wheel. Here are some other things to consider:
- Does the person driving your car have their own car insurance policy?
- Does the person driving your car live in a different state?
- Does the person driving your car have a valid driver’s license?
- Have you checked your policy to get the specifics about the other driver and how they’re covered—or if they’re covered at all?
- When you loan your car, are the insurance and registration details in the glove box?
- Have you contacted your insurer to include a named driver to your policy if they’re going to be driving your car regularly?
Bottom line: Remember all these things before allowing someone else behind the wheel of your car. For example, letting your roommate who has insurance coverage and a valid driver’s license relieve you on a road trip may be less of a risk than letting her uninsured friend from two states away take over at the next gas station.
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