Does My Car Insurance Cover Other Drivers?

Does My Car Insurance Cover Other Drivers?

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Your car insurance will protect another driver when you loan them your car.

When you loan your car to a friend or relative, your policy will typically be the primary policy — meaning it pays out first. If the person you loan your car to also has an insurance policy, that'll pay out as secondary coverage — meaning it pays out later.

Your policy will also protect you when driving someone else's car, whether it belongs to a friend or you're renting it from a company.

Does car insurance follow the car or driver?

Car insurance follows both the car and the driver, but the policy associated with the car will usually pay out first.

Your policy will generally apply to anyone who is driving your vehicle. For example, if your friend is in an accident while borrowing your car. Your policy will also cover you when you're driving someone else's car, whether it belongs to another person or a rental car company.

This applies to most types of coverage, including liability, comprehensive/collision and personal injury protection (PIP), or medical payments (MedPay).

Whose car insurance policies apply if someone else crashes my car?

  1. Your policy, tied to the car
  2. The driver's policy, tied to them
  3. A policy belonging to the driver's resident relative

Policies will usually pay out in the order above and move to the next policy as the first one is exhausted. So if someone is liable for $25,000 of damage and you have $20,000 of liability coverage, the next $5,000 would come from their policy.

One possible exception is PIP/medical payments coverage, if you have it. In some states, the driver's own PIP (or health insurance) may pay out first.

Do my liability, comprehensive/collision and PIP coverages protect someone else driving my car?

In general, all the main parts of your car insurance policy transfer to another person if you loan them your car, so long as they have your permission. This includes liability protection, comprehensive/collision and PIP/MedPay.

  • Liability coverage covers injuries to people and damage to property when you (or someone driving your car) is at fault in a crash.
  • Collision and comprehensive coverage pay for damage to your car in a crash and any other cause, such as theft or vandalism. These two coverages pay out no matter who is driving or who was responsible for the damage.
  • Personal injury protection/medical payments coverage pays for medical expenses for you or whoever was driving your car after a crash, in addition to passengers in your vehicle.

Note: For liability and comprehensive/collision, the policy that belongs to the owner of the car will usually go into effect first, with any additional coverages owned by the driver coming after, if necessary.

But for medical benefits (PIP/MedPay), whose coverage pays first may vary by state. Read your policy or talk to your insurance company to understand how PIP/MedPay go into effect for a third-party driver.

When doesn't your car insurance cover other drivers?

The most common scenario in which your car insurance won't cover other drivers is if they're a "named excluded" driver on your policy.

An insurer would never add a named excluded driver on your policy without your permission. You might choose to exclude a driver if someone you live with has been identified as high risk — like if they have multiple speeding tickets. Keeping a high-risk driver on your policy will raise your rates, so taking them off will lower them.

When you explicitly exclude someone from your policy, your insurance company can refuse to pay for any damage following a car accident. Who is and who is not allowed to drive an insured vehicle can vary based on where you live and the company that insures you. In some states — such as New York, Kansas, Michigan, Virginia and Wisconsin — you cannot exclude a driver from your policy. Auto insurers in those states might not sell you a policy unless you include every licensed driver you live with on your policy.

The other way someone might not be covered by your insurance is if they do something against the terms of your policy. For example, an unlicensed driver will not be covered, nor would someone who borrows your car to commit a crime and damages it in the process.

Does your car insurance protect you when driving another vehicle?

Yes, your car insurance protects you when you're using someone else's car.

Your own car insurance will protect you (and your resident family members) when you're driving a car that doesn't belong to you. This includes borrowing a car from a friend, as well as renting a car from an agency or using your dealer's loaner vehicle while your car is being repaired.

Generally, you'll be covered by the owner's coverage first, with your coverage acting as secondary. It would go into effect only if the car owner's coverage was insufficient.

Am I covered when renting a car?

Your car insurance policy will cover you when renting a car, and it's usually the primary coverage when you get a car at Hertz or Enterprise. That means your own policy will pay for the damage, with any coverage from the rental company coming in second.

Many credit cards include a perk that covers damage to rental cars. Most of the time, these benefits are "secondary," meaning they pay out only once your own policy is exhausted. Some credit cards offer primary damage coverage, meaning they'll be first in line to pay for vehicle damage. This is the preferred option, though many credit cards that offer this are fairly expensive.

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Does car insurance cover damage if someone steals your car?

If someone steals your car, generally car insurance covers any damage they incur to other people or property. You may have to use collision or comprehensive insurance to cover damage to your own vehicle; though again, this will depend on your individual policy.

If your friend takes your car without permission and crashes it, their insurance could be considered primary — but this is not likely. Unless you have clear-cut evidence you did not give permission to your friend to drive the car, your insurance company will likely treat it as though they were permitted to drive the vehicle.

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