Does Car Insurance Follow The Car or The Driver?
Say that your car is in the shop for repairs or currently in storage. If you got to commute to work or run errands, you’d probably ask a friend or family member to use their car for the time being. There may be a time when the inverse happens –a friend or family member may need to drive your vehicle while theirs is indisposed. Some questions about auto insurance may be raised when using another’s car. The most commonly asked one is, “does car insurance follow the driver or the car?”
Let’s start with the short answer –yes, normally insurance does follow the car as opposed to the policyholder themselves. It’s called car insurance because the car is quite literally the thing being insured. Your policy and limits directly apply to the vehicle regardless of who is behind the wheel, as long as they have permission to drive in the first place. That being said, there are some instances when auto insurance follows the driver or policyholder instead of the car. Because of this, the answer isn’t always clear. Not to worry because that’s what this guide for what car insurance follows.
What Are The Types of Coverage And What do They Follow?
When we say policies or coverage, we are referring to specific insurance types.
Here’s the kind of insurance policies you would have to keep in mind and what they follow:
- Liability insurance - 48 out of 50 states have their own minimum insurance requirement for liability coverage in the event you cause someone personal injury or property damage in an accident that was your fault. You won’t be able to get on the road without it. Typically, this follows the vehicle.
- Full coverage - Adding comprehensive and collision insurance to your coverage is what is considered full coverage. With comprehensive insurance, the car is covered in cases of situational damage like theft or nature. Collision covers your car’s damages in an accident where your liability insurance would cover the other driver. Full coverage typically follows the vehicle.
- Named driver - In order for car insurance to apply to another driver in certain states, they have to be listed on the auto policy itself. Most cases allow for permissive use, but it never hurts to check with the insurance company or state laws.
- Permissive use - Having another driver’s name on the policy may not always be required, but permission from the vehicle owner is always a must. The car owner’s consent to drive their car is their consent to use their car insurance.
What is The Difference Between Driver Insurance and Car Insurance?
There is no official “driver” insurance; it’s all an auto policy or car insurance. However, there are a couple of factors that determine whether the car or driver is covered. Here’s an introductory example –your car insurance policy will always have your name and/or a list of others who are able to drive the car insured. The car itself is insured as long as it’s being operated by any of the named drivers.
Most states have it down as a law that being named on a policy is the only way you can drive another car with insurance. Others simply rely on the consent of the vehicle owner or policyholder. A good way to think about it is, when you borrow someone else’s car, you’re also borrowing their car insurance. This would be the most common and standard example of insurance following the car, and not the driver.
If you were to get into an accident with someone else’s car, then you would be covered by their policy limits which they set. However, if the damages exceed the policy limits, then you will be responsible for the remaining amount. Here’s where personal insurance comes into play. If you have your own insurance policy, such as a non-owner insurance plan, then it covers the remaining amount as secondary insurance. This is an example of driver-orientated insurance like non-owner insurance.
What is Non-Owner Car Insurance, And How Does it Work?
Non-owner car insurance is an example of insurance that follows a driver rather than a car. This type of driver insurance is for those who may not own their cars and frequently use other’s vehicles. Non-owner car insurance offers liability coverage with personal injury and property damage to the other driver in an accident that you caused. Policy add-ons are also readily offered by insurance companies. For an additional cost, you can have coverage for uninsured motorists, comprehensive damage, and collision damage.
Drivers who typically invest in a non-owner policy are those who don’t own a car and drive another person’s vehicle a lot. They may also rent or lease cars for more than a week a year. While renting companies require their own insurance, having a non-owner is not only cheaper but provides the same amount of coverage with some add-ons. Drivers often take out a non-owner policy when their car is unavailable to avoid lapses in coverage. Another time to invest in a non-owner plan is after a DUI violation in addition to your SR-22, enabling you to drive fully insured for the time being.
When Would Insurance Follow me as a Driver?
While car insurance mostly follows the car and not the driver, there are instances where the insurance follows the driver. Let’s use yourself as an example. Let’s say that you don’t own a car or your car is indisposed at the moment. In order to get around, you’ll have to use a friend or family member’s car.
Here are some instances where your own car insurance, deductibles, and limits follow you in another car:
- Permissive use - We previously gave the definition of permissive use and now here’s how it works. This would be required to borrow a family member’s or friend’s car. You wouldn’t have to borrow their insurance and can use your own.
- Car is unavailable - If your car is being repaired or is out of commission for a period of time, then your insurance follows you in any borrowed car with permissive use to avoid lapses in your coverage.
- Renting a car - If you’re unable to borrow a car, then you can rent one for the time being. Normally rental companies sell their own insurance, but you may use your own. However, your comprehensive and collision insurance may not follow you –only your liability.
When Would Insurance Follow The Car?
Now, let’s think about the inverse. You have your car complete with full coverage, and a friend or family member asks to drive your car. You will not have to worry because your auto insurance follows your car. Questions may begin to arise when people outside your household borrow your car.
Here’s when your car insurance follows the car itself:
- Family members - Immediate family members that may live with you, may already be listed on your insurance policy. Furthermore, extended families may also be covered under your car’s insurance when they come to town.
- Road trips - Traveling on the road is great because people often bond over the shared responsibility of driving. Your insurance applies to anyone in your party behind the wheel with no lapses in coverage.
- Family or friend’s car is indisposed - If someone you know and love has their vehicle in the shop receiving repairs and they ask to borrow your car, your auto insurance covers them while they drive where they need to.
When Would my Policy Not Cover Other Drivers in my Car?
There are a couple of ways in which someone else driving your vehicle may not be covered by your policies that follow the car.
These cases, however, are extremely specific:
- Excluded driver on your policy - Listing someone as an “excluded driver” on your insurance policy means they are not to recieve coverage of any kind when driving the vehicle the insurance follows.
- Vehicle is a rental - When you drive a rental car, your insurance is following you as a driver. So, if anyone else were to drive the rental vehicle, they would not be insured unless they have insurance of their own.
- Vehicle is used for commercial purposes - A vehicle being used for work reasons such as ridesharing or storing equipment for a service won’t be covered by your auto insurance while you’re on the clock.
Is There Anything Else I Should Know About Auto Insurance And Sharing Cars With Other Drivers?
Insurance companies are aware that people share their vehicles, so they design their policies with that in mind. For the most part, drivers list some friends and family members as included drivers on their policy. There’s no extra charge for adding a name to one because the car is receiving the insurance.
Being an included driver on the policy means that you would be entitled to the insurance limits and coverage the moment you start the ignition. The vehicle’s insurance serves as the primary, while your personal insurance (if you have any) acts as secondary. This is the typical case for most drivers because insurance follows the car.
But as you’ve read and learned, there are some exceptions. Policyholders will often opt for more supplementary insurance like accident or minor violation forgiveness when driving another’s vehicle as it provides more security should something like a minor accident or traffic violation happen. Those who lend out a vehicle they use for work purposes on a regular basis purchase personal auto insurance in addition to their business policy so that anyone driving will be insured. That’s another example of insurance following the car.
In conclusion, insurance does indeed follow the vehicle. But, it never hurts to check with the vehicle owner or insurance company. Want to Read more about this topic? Read about Rental Car Insurance or Can I drive somebody else’s car without insurance?