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Insurance Follows the Car, Not the Driver

By May 26, 2020January 6th, 2021Insurance

Scenario: Your family member asks to borrow your car. You graciously agree to be a good Samaritan and hand over the keys. Little do you know, you’re also handing over your insurance. Generally, when someone borrows a car, they’re borrowing the insurance attached to the car, too. This means that if your family member gets in an accident, you will be held financially responsible for any damages, and possibly even the deductible. Here are some essential considerations that we’ve thrown together to help you determine who will be covered under your auto insurance policy.

Auto Accidnet with Dollar Sign

In Insurance, Specifics Matter

Do they borrow the vehicle regularly? Are they a member of the household? Is the car being used for business reasons? If each answer is no, coverage will likely extend to whoever you lend the car to. This is due to the permissive driver clause, which occasionally allows for the lending of your vehicle to someone and still keeps your coverage in effect. To be sure about the specifics of your individual policy, check with your auto insurance company.

Adding a Driver to your Policy

If someone who doesn’t live with you is borrowing your car regularly, or if they plan on borrowing the car for an extended period of time, you should add them to your auto insurance policy. This will ensure that if they get into an accident driving your car, they will have coverage. Failure to do so can result in a denial of the claim as you are required to report all household drivers and either include or exclude them. The carrier will generally exclude undisclosed household members, so be sure you inform your agent or carrier of all household members this includes roommates and family members.

Borrowing for Business Reasons

If the person who borrows your car plans to use it for business reasons (delivering pizzas, taking a work trip, etc.), it is likely that they will not be covered in the case of an accident without a commercial auto policy for the vehicle.  Check with your auto insurance provider to determine whether or not this is a risk for you.

It’s certainly possible (and kind) to lend a car to a friend, coworker, or family member. Whether they need your large bed to carry some furniture, or just need a set of wheels until their own car is out of the shop, do yourself the service of protecting yourself and them from unnecessary costs if anything goes awry, but be sure there is not an exclusion on your policy for permissive use or exclusion on that household member. For questions regarding auto insurance or any other type of coverage, don’t hesitate to contact Insurance Incorporated for all your insurance needs.


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