Am I Insured if I Drive Someone Else’s Car?

Imagine this scenario: 

While your car is in the shop, your friend allows you to borrow their own vehicle. All is going well until you accidentally rear-end the truck in front of you. Beyond having to deal with the embarrassment of telling your friend you damaged their car, you may be wondering another question: 

Whose auto insurance will cover the claim? 

Drivers often have questions regarding whether auto insurance policies follow the car or the driver, especially in the event of an accident or claim. 

This commonly misunderstood scenario is something we are frequently asked about by clients at Berry Insurance, so it is important for every driver to know the differences and limitations of their auto insurance policy, as well as the insurance policies of those whose cars they’re borrowing. 

In this article we will review how auto insurance coverage handles claims on borrowed vehicles and if you are protected while behind the wheel of another’s car. 

Does auto insurance follow the car or the driver? 

In the event that you borrow a friend’s car, or vice versa, and are involved in an accident, it is crucial to understand whose auto insurance coverage would cover the claim. 

Typically, auto insurance will follow the car instead of the driver. “Follow the car’ meaning that the auto insurance coverage will come from whoever owns the vehicle. This is even the case when the vehicle is behind driven by someone else not listed on the policy at the time of the accident. 

So, if you allow your friend or relative to use your car and they are involved in an auto accident, it would be your own insurance covering the claim. The same applies if you are borrowing someone else's car – their insurance would protect the car, not your insurance. 

Limitations of auto coverage when driving another’s car

Drivers and policy holders should be aware that there may still be exceptions of coverage of borrowed vehicles, as several factors could determine the extent to which a person or vehicle is covered by another’s insurance - if they receive coverage at all. 

Beyond your own state’s limitations, different scenarios could result in borrowed vehicles or drivers not being covered by the owner’s auto policy. These can include:

Excluded drivers: 

Who you have listed on your auto policy is an important part of ensuring the members of your household receive coverage. While drivers borrowing your vehicle will still typically receive coverage from your policy (or vice versa), coverage would not extend to excluded drivers on a policy. Excluded drivers are any drivers or household members explicitly written to be excluded from insurance coverage. 

While it is unlikely a policyholder would give permission for an excluded driver to operate their vehicle, they should make note that some insurance carriers may not cover your claim or renew your policy if you allow an excluded driver to get behind the wheel of your vehicle. 

Non-permissive use: 

If it is made clear that the owner of the vehicle did not give permission to the operator of the vehicle at the time of the accident, then the driver’s insurance would be responsible for coverage of and claims or repairs. This would be the case if your vehicle was stolen and involved in a collision. 

Commercial use: 

If a driver is allowing their personal vehicle to be operated by a business or other commercial venture (such as a paid car-sharing company), then their personal auto insurance would not cover damages made to it in the event of an accident. 

Instead drivers lending their vehicle for commercial use should look into receiving insurance through the business or obtaining their own commercial auto policy. To learn more about this type of policy, read our guide on what a commercial auto policy offers. 

Exceeded coverage limits: 

In the case of repair costs exceeding the insurance policy’s coverage limits, being the maximum amount the insurance policy will pay for repairs, then it would be up to the driver’s insurance to cover the remaining amount. 

When borrowing a vehicle, drivers should know that if they are found at fault in an accident, the insurance surcharge would follow their policy and not the policy of the vehicles’ owner. 

Breaking down auto coverage

While every case is different, now you know some of the limitations of auto coverage and how it extends to drivers borrowing vehicles. 

We at Berry Insurance would recommend that if you are planning to regularly allow a friend or relative to operate your vehicle, it would be best to have them included on your auto policy. The same applies if you are going to regularly be borrowing another’s vehicle as well –  you should be added to their insurance policy to avoid any confusion or holdups in the event of a claim. 

Wondering who else should be listed on your auto policy? For everything you need to know about what goes into listing drivers on a policy, check out this article: Who Needs to be Listed on Your Auto Insurance Policy?