Does My Car Insurance Cover Other Drivers?

Does My Car Insurance Cover Other Drivers?

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If you want to loan someone your car, they're typically covered under your car insurance policy — with some exceptions.

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 damage, so it follows the car. If you let your friend borrow your car and they crash it, then 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 file a claim against the other driver's property damage liability insurance to repair your car. On the other hand, if the accident was their fault or you don't have collision insurance, you'll need to pay for the repairs out of pocket.

This is also true for liability coverage. Therefore, if your friend borrows your car and causes an accident, then your 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 your friend’s car insurance can be tapped into to cover the rest of the damages, assuming they are insured. Keep in mind that if your friend doesn’t have their own insurance, you may be held liable for the damage they caused.

First-party medical benefits

In some states, you may be required to buy personal injury protection (PIP) or medical payments insurance (MedPay). These cover medical costs, regardless of which driver was at fault, and are generally restricted to the "named" insured and their family. For example, if a policyholder's wife was injured in a car accident, the policy would extend to the spouse.

When doesn't your car insurance cover other drivers?

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 person you live with (of driving age) on your policy.

We recommend you read over your own policy, specifically within 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 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.

Nonowner car insurance

If you frequently lend out your car, consider telling the borrower about nonowner car insurance, which provides extra liability insurance to people outside your household. If the nonowner borrows your car and causes an accident, that person would be covered.

Mark is a Senior Research Analyst for ValuePenguin focusing on the insurance industry, primarily auto insurance. He previously worked in financial risk management at State Street Corporation.

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