Your car insurance will cover most damage costs if someone else crashes your car. There are a few exceptions however. Read ahead to know all the key situations of when your auto insurance will serve as the primary insurance for another driver.
Does Car Insurance Follow the Car or Driver?
Your collision and comprehensive insurance is always the primary insurance of your vehicle when it comes to physical damage, thus it follows the car. For example, if you lent your car to your friend, and they crash it , you would file a collision insurance claim through your own insurer to repair the damage. If you don't have collision or comprehensive insurance on your policy, you will have to hope your friend didn't cause the accident.
If the accident wasn't their fault, you can still file a claim against the other driver's property damage liability insurance to repair your car. If it was their fault, and you don't have collision insurance, either you or they will need to pay for the repairs out of pocket.
In terms of personal injuries, the liability portion of your auto insurance follows you, rather than the car. Therefore, if you have a friend who borrows your car and causes and accident in which people are injured, your bodily injury liability insurance would be the primary coverage used -- even if you weren't in the vehicle at the time of the accident. If the crash is particularly severe, and the limits of your policy are exhausted, then the driver's car insurance can be tapped into to cover the rest of the damages, assuming they are insured.
First Party Medical Benefits
In some states, you may be required to buy personal injury protection (PIP) or medical payments insurance (MedPay) which are meant to cover medical costs, regardless of which driver was at-fault. Generally, these types of medical insurance are restricted to the 'named' insured and their family. For example, if the wife of a driver with PIP was injured in a car crash--even if the spouse was not present--the spouse's PIP would still cover her. On the other hand, if it was the spouse's friend who was operating the vehicle the coverage would not transfer over.
When Doesn't Your Car Insurance Cover Other Drivers?
In general, if the driver of the car is someone you explicitly excluded from your policy, your insurance company can refuse to pay for any damages. 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, like New York, Kansas, Michigan, Virginia, and Wisconsin you cannot exclude a driver from your policy. Auto insurers in those states, however, may not sell you a policy unless you include every person you live with (of driving age) on your policy.
We recommend you read over your own policy, specifically underneath the sections titled "exclusions" and "insured persons". There you will get a better sense of who can and can't drive your car, and when your insurance company won't cover them in case of an accident. For every driver not explicitly excluded, everything we said above will be true.
Does Car Insurance Cover Damage if Someone Steals Your Car?
If someone steals your car, generally you wouldn't be responsible for any damage they incur to other people or things. 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 just treat it as though they were permitted to drive the vehicle.
Non Owner Car Insurance
If a person often borrows and or drives your car, you may want to consider recommending them a non owner car insurance policy. A non owner car insurance policy is great for drivers who find themselves driving cars that they don't own. These policies provide extra liability insurance which can be perfect for people like nannies who may drive around your kids. If they were to get into a car accident, your car insurance would probably be exhausted in covering any potential injuries to the children. A non owner car insurance policy would provide extra protection for the nanny's potential injuries.