It's a common scenario: your car is being repaired in the shop, and your mother-in-law has offered her car until yours is repaired. Or you're visiting home from college and want to meet up with some friends, but you left your car on campus. Should you borrow someone else's car or let someone borrow yours in any situation? Would you still be covered if you do? Whose auto insurance is responsible?
As a driver, you may find yourself in the position of driving someone else's vehicle or temporarily lending your vehicle to someone. Whatever the situation, there are some things you should be aware of. Are you (and your vehicle) protected in case of an accident? Does your car insurance follow the car or the driver?
Driver vs. Car Insurance
The answer isn't so simple. Insurance coverage varies by insurer and policy, but in general, there are coverages that can follow you or your car. There are several factors that determine whether and to what extent a person or vehicle is covered, including the names listed on the insurance policy, the state where you live and whether you have the permission to drive someone else's vehicle.
Is my car insurance policy valid for other drivers who operate my vehicle?
Other drivers operating your vehicle are usually covered by your car insurance if they are listed on the policy. This may include your spouse or significant other, your parents, your siblings or your children. Other members of the household may also be included.
The issue becomes murkier for those who are not listed on your policy, such as friends or extended family members. Whether or not the policy covers these situations is usually determined by consent. If other people drive your car with your permission (that is, you told them they could drive it or handed them the keys), they should be covered under the terms of your policy.
Drivers who are not covered under your policy may be covered in the following situations:
When extended family members pay you a visit or stay at your home.
When sharing driving duties on a road trip or a long drive.
When friends and family members borrow your car when theirs is being repaired.
Certain drivers and activities are generally not covered by your auto insurance policy in a few scenarios. These are some examples:
In most cases, your insurance will not cover other drivers if they pay to use the vehicle (for example, if you rent it to a car-sharing company). This activity will almost certainly necessitate the purchase of a separate, specialized auto insurance policy.
Excluded drivers (those specifically listed on the policy as not covered) are usually not covered when driving a car under the terms of your auto insurance policy. Excluded drivers may have minimal coverage in some states, but this (and the exact type of coverage provided) will depend on where you live. You should seek advice from your auto insurance provider on this.
If you use your vehicle for business purposes, your car insurance policy will most likely exclude incidents that occur while doing so. This can include using the vehicle to deliver pizzas, driving for a transportation network company that offers car rides or ride-sharing, or operating some sort of delivery or concierge service. These types of activities will almost certainly necessitate a separate insurance policy or supplement.
Is my car insurance valid when I drive another vehicle?
You'll be covered when driving that car if you're specifically listed on the car owner's insurance policy - even if it's not your own. If you're not on the owner's policy, applicable coverage will again depend on consent.
You're probably covered if the driver gave you permission to operate the vehicle or, at the very least, there's a reasonable belief that you had permission to drive it. If you pay to drive the car (for example, by renting it from a rental car company or a car-sharing service), this also constitutes assumed permission.
Here are some examples of situations in which your auto insurance policy would typically cover you:
Driving your parents' car with their permission, provided you are not listed as an excluded driver on their insurance policy.
Borrowing a car from a friend or family member with permission while yours is being repaired.
Using a car rental company or a car-sharing marketplace to rent a car.
Remember that your full coverage may not apply to a rented or borrowed vehicle. Your liability coverage will usually extend to the vehicle, but comprehensive and collision coverage may not. The good news is, if you're in an accident while driving a borrowed vehicle, there's a chance the owner's car insurance may provide some coverage. Again, you should consult with your insurance agent to determine how you are covered and the limits of your auto insurance policy. It might be a good time to inquire about other ways you can gain peace of mind with optional coverages like Accident Forgiveness and Minor Violation Forgiveness. These are optional features that can help you avoid a premium increase following your first covered accident or minor violation.
Vehicle Sharing Suggestions
If you plan to share a vehicle with another driver on a regular or even infrequent basis, adding them to your auto policy (and vice versa) can help ensure that you're both covered in the event of an accident. You should also make sure they're legally licensed (and that the license is not expired).
If you plan to use the car for business or rent it out to others, you should think about getting supplemental insurance. This can help protect your investment in the vehicle as well as keep you safe from liability.
Finally, before operating a vehicle, always obtain direct permission from the owner. Driving someone else's car without proper consent can pose a liability issue for both of you.
Every case is unique.
Because every auto insurance policy is different, the actual coverage you'll have when driving a borrowed car (or lending one to someone) can vary greatly. It will depend on the exact terms of your car insurance policy, the state you live in, the driver in question and the type of loss suffered.