Does Car Insurance Cover the Car or the Driver?
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Borrowing another person’s car may not seem like a big deal. But if you get into an accident, someone’s auto insurance rates are likely to rise. The question is, will it be their rates or yours?
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Does car insurance follow the car or the driver?
In general, car insurance follows the car, not the driver. But what does that mean?
Let’s say your friend borrows your Hyundai Accent and gets into an at-fault accident. Assuming you have collision insurance for the Accent, the damage to it would likely be covered. But because your insurer would be footing the bill, your insurance rates would likely go up — not your friend’s.
However, if you decide to pop behind the wheel of your grandmother’s Toyota Corolla and get into a crash, the insurance you have on the Accent likely wouldn’t pay out. Instead, your grandmother’s car insurance would cover any repairs to the Corolla. And this time, your grandmother’s insurance rates would probably increase while you’d be off the hook.
But like most rules, there are exceptions.
Whether or not someone’s car insurance follows the car or the driver ultimately depends on several factors, including the:
State.
Insurer.
Names on the auto insurance policy.
Whether the owner specifically gave the borrower permission to drive the vehicle.
Be sure to read your policy carefully and reach out to your agent about your specific situation.
Times when car insurance follows the car
In general, your car insurance protects you while driving your own vehicle.
Your policy will typically also cover someone else driving your car if they meet one of the requirements below:
The person is listed on your auto insurance policy.
You’ve given them permissive use, or specific permission to use your vehicle. (This can be with or without you also in the car.)
Note, though, that how much coverage a person driving your car receives varies both by insurer and state.
Your policy won’t cover someone else driving your car if:
You specifically exclude them from your policy. You may want to do this if you’re worried a risky driver will borrow your car and get into an accident.
Your friend takes your car without your permission. Keep in mind that if your friend doesn’t have car insurance, your insurance may still cover any damage.
You’re loaning your car out through a paid car-sharing service like Turo.
If someone is driving your car often and is related to you or lives with you, it’s best to add them to your policy. In fact, in some cases, your insurer might automatically add any adults living in your household. If someone borrows your car consistently but isn’t a family member or living with you, they should consider getting non-owners car insurance.
Times when car insurance follows the driver
Although your car insurance generally follows the car and not the driver, there’s one notable exception: if you rent a car for personal use. This means if you have insurance on your own car, you generally don’t need to buy any extra coverage from the rental company, despite pressure from a salesperson. Your car insurance will apply to the rental.
If your personal insurance only includes liability coverage, you may want to buy additional protection that will pay for damage to your rental car if you get in an at-fault accident.
Read our rental car insurance article for more details on how your own policy works when renting a vehicle.
Primary insurance vs. secondary insurance
In certain circumstances, both your insurance and the insurance of the person driving your vehicle may be applied. This may happen if your friend crashes your car and the damage exceeds your insurance limits. In this case, your coverage would act as the primary insurance, or the insurer that pays first, up to your coverage limits. Your friend’s insurance is secondary and would pay for the rest of the damage.
Alternatively, your insurer may pay for any initial damage and then ask your friend’s insurer to reimburse the cost.
In either case, both your and your friend’s insurance rates would likely increase.
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