Does auto insurance cover borrowed cars? This question is necessary for anyone who has ever borrowed or lent a vehicle.
Many people borrow cars from friends or family members, but they’re not always sure if their insurance covers them in case of an accident.
So, if you’re borrowing a car, it’s important to know whether you’re protected. What happens if you get into an accident or someone else drives your car and gets into a wreck?
Knowing what your auto insurance policy covers can help you avoid unexpected costs and stress.
In this article, we’ll explore the details of auto insurance policies and borrowed cars. So, stick with us to be enlightened.
Does Car Insurance Follow the Car or the Driver?
In most cases, auto insurance follows the car, not the driver. This means that if you let someone borrow your car, your insurance is usually the one that pays first in case of an accident.
Even though someone else is behind the wheel, your insurance policy is responsible for covering the damages.
Let’s say your friend drives your car to run errands, and they accidentally hit another vehicle. Your auto insurance would typically step in first to cover the costs.
If the damage is too high and your coverage isn’t enough, then your friend’s insurance might help as secondary coverage.
What Is “Permissive Use”?
One important rule in car insurance is called permissive use. This simply means that someone has your permission to use your car.
If you allow a friend or family member to borrow your car, and they don’t live with you, most insurance companies will still provide coverage.
However, there are limits. If the person borrowing your car drives it often; like daily trips to work, your insurer may expect them to be listed on your policy.
Otherwise, you might not have full coverage if something goes wrong.
What Happens If Someone Crashes Your Car?
If someone borrows your car with your permission and gets into an accident, here’s what usually happens:
- Your insurance pays first. It will cover things like damage to other people’s cars, medical bills, and possibly damage to your own car if you have full coverage.
- If the damage is more than your policy limits, the driver’s insurance may help as secondary coverage.
- If you don’t have certain coverage, like collision or comprehensive, you may have to pay out of pocket for your car’s repairs.
So, even if someone else caused the accident, your policy could still be used—especially if you gave them permission to drive your car.
When Insurance Might Not Cover a Borrowed Car
There are times when insurance might not cover an accident involving a borrowed car. These include:
- If someone takes your car without asking, your insurance may not apply. This could be considered theft or unauthorized use.
- If your insurance policy specifically lists someone as excluded (not allowed to drive), and that person crashes your car, there’s usually no coverage.
- When someone uses your car to make deliveries, drive for a rideshare company, or for another business activity, your personal auto insurance might not cover them. You may need special commercial coverage in those cases.
- If someone drives your car regularly, they should be added to your policy. If not, your insurer might deny a claim after an accident.
What If You Borrow Someone Else’s Car?
Now let’s switch things around. If you’re the one borrowing a car, here’s what you need to know:
- The car owner’s insurance comes first. If you crash the car, their policy will usually cover the damages.
- If the costs are more than their insurance limits, your own insurance (if you have one) may help with the extra expenses.
- If you don’t have car insurance, and the owner’s coverage isn’t enough, you might have to pay out of pocket.
Always ask the owner if their car is insured and what kind of coverage they have before driving their vehicle.
What About Rental Cars or Car-Sharing Services?
Borrowing a car from a rental company or using a service like Turo works differently. Here’s how:
- Rental companies usually offer insurance you can buy with your rental. It often includes basic liability, damage protection, or both.
- Your personal auto insurance may cover rental cars, but not always. Check with your provider first.
- Some credit cards offer rental car coverage, but it’s usually limited to damage to the rental car itself; not liability for injuries or damage to others.
- Car-sharing platforms often offer coverage options, but you may have to pay extra for full protection.
Tips Before Letting Someone Borrow Your Car
If you’re thinking of letting someone borrow your car, here are a few helpful tips:
- Make sure they have a valid driver’s license.
- Check their driving history if possible.
- Confirm that your insurance allows permissive use.
- Be clear about where and how they plan to use the car.
Lastly, consider adding frequent drivers to your policy for better coverage.
Final Thought
Does auto insurance cover borrowed cars? Auto insurance usually covers the car first, not the person driving it. If you give someone permission to use your car and they have an accident, your insurance will likely be used to pay for damages.
But there are exceptions, especially if the driver wasn’t allowed to use the car, or if the car was used for business.
Before you borrow or lend a car, take a few minutes to understand the insurance coverage involved. A quick conversation can save you from stress, confusion, and big repair bills later on.
