Are you driving a borrowed car or lending your vehicle to another driver? What happens if you crash into another vehicle or if they cause an accident? Are you protected by your auto insurance coverage?
If you’re planning to lend your car to a family member while they’re visiting from out of town or borrowing a friend’s car while yours is out of commission, it’s important to review both of your car insurance polices to make sure you understand what will happen if you are in an accident while driving their car or if they get in an accident while driving yours.
Car vs. Driver: Who Is Covered Under an Auto Insurance Policy?
Every auto insurance plan is different, and who is covered under a car insurance policy depends on several factors:
- The terms of your insurance policy
- Who was driving the vehicle
- The names listed on the insurance policy
- The amount of damages caused or losses suffered
- The state you live in
However, while the specifics may vary based on these details, car insurance policies generally cover the car and not the driver. Your auto insurance will typically cover other drivers operating your vehicle. If you let someone borrow your car and they get into an accident, your auto insurance will likely be responsible for the claim, which will then go on your insurance record.
Whether your insurance will cover losses caused by another driver may also depend on whether you gave them permission to borrow it. If they had permission to drive your vehicle—in other words, if you verbally told them they could drive your car or if you gave them the keys, a situation called “permissive use”—most car insurance policies will cover them in the case of an accident.
It’s important to keep in mind that laws vary state by state and policy by policy. Be sure to read the terms and conditions of your car insurance plan as well as the other driver’s plan to determine whether you are covered in case of an accident. If you have additional questions, talk to your insurance agent.
When Are Drivers or Activities Not Covered by Car Insurance?
There are few situations in which other drivers or activities will generally not be covered by your auto insurance plan:
- Someone drives your car without your permission (called “non-permissive use”)
- A thief steals your vehicle
- Someone listed as an excluded driver on your policy operates your car
- The driver is paying to use your car
- The driver is using your car for commercial purposes
In some cases, depending on the circumstances surrounding the accident, you still may have to file a claim with your insurance company to cover damages to your vehicle. Talk to your insurer to get clarification on the details of your specific auto insurance policy.
Contact Melton McFadden to Get Commercial Vehicle Insurance in Michigan
At Melton McFadden, our experienced insurance professionals can help you develop an auto repair business insurance plan that protects your finances, employees, and peace of mind. We are ready to guide you through the process of identifying coverage essentials, finding gaps in your current insurance plan, and creating a solution that works best for you and your business.
Whether you are looking to expand your current commercial vehicle insurance coverage, sign up for a new business insurance policy, or invest in a plan to protect your employees, we’re here for you every step of the way.
Contact us today or request a free quote to get started.