Does My Car Insurance Follow Me or the Car?
Your daughter borrows your car and causes an accident. You let your best friend borrow your car because his vehicle is in the shop. Your friend then causes an accident. A person breaks into your garage, steals your car, and crashes. Will your car insurance cover these accidents? Yes, but there are some important limitations.
Your car insurance will typically follow your car, regardless of who is driving. It is important to read your automobile policy. Your car insurance policy will state who, when, and what is covered and not covered. It is also important to understand that there are different types of car insurance, and each type protects different events and things.
LIABILITY COVERAGE
As a licensed driver in Washington State, you are required to carry a minimum amount of liability insurance to cover the cost of damage you cause others while driving. Liability insurance pays for such things as the cost to repair another driver’s car and medical expenses. This type of insurance follows the driver regardless of whose vehicle they are driving.
So, if your best friend borrows your car and causes an accident, his liability coverage will pay for the vehicle damages and any medical care he caused someone else while driving your vehicle. But this does not mean you’re necessarily off the hook. What if you knew your friend had a history of driving while intoxicated and the accident was caused by your friend’s intoxication? In that case, it is highly likely the other driver will pursue a claim against your insurance or, if your policies don’t cover the event, against you personally. This is why it is important to only let people you can trust and who have safe driving habits borrow your car.
COMPREHENSIVE COVERAGE
Comprehensive coverage is not required by law, but if you took out a loan to finance your car purchase, your lender probably required you to buy comprehensive coverage. Comprehensive coverage covers the cost to repair or replace your vehicle in case it is stolen, vandalized, or damaged by fire, water, hail, or falling tree limbs, to name but a few events. It does not cover damages or medical expenses caused by a collision with another vehicle.
Comprehensive coverage follows the car, not the driver. So, if your daughter or friend borrows your car and it is damaged during a thunderstorm, look to your comprehensive coverage.
COLLISION COVERAGE
Collision coverage pays for damages to your car following a collision. It typically provides coverage regardless of whether you are at fault. Importantly, it does not pay medical bills.
Like comprehensive coverage, it is not required by law in Washington State, but lenders typically require collision coverage if you took out a loan to purchase the car. If you’ve ever rented a car, chances are you’ve been asked if you want to purchase collision coverage for the vehicle. This is because collision coverage will not typically cover a rental car. Your liability coverage and comprehensive coverage generally will, but make sure to read your policy to know for sure.
So, if your daughter or best friend borrows your car and gets in an accident, collision coverage should cover the costs to repair your car and the cost to rent a car while your car is in the shop.
PAID CAR SHARING
Car sharing has become wildly popular. A software app called Turo allows people to rent out their personal car to others. There are other similar apps. A question that often comes up is: Does my personal car insurance cover my car if someone pays me to use my car? The short answer is no.
If you want to rent your personal car to others, you need to contact your insurance broker about purchasing “Car Sharing Insurance.”
EXCLUDED DRIVERS
Excluded drivers are people you intentionally ask your insurance company not to cover while driving your vehicle. It’s rare that someone goes out of their way to exclude others, but there are situations where it is to your advantage to do so. Say, for example, you have a 25-year-old son who has had multiple speeding tickets, a history of driving while intoxicated, and has wrecked several of your vehicles. He is a high-risk driver.
If you keep your high-risk son on your car insurance, you can expect your premiums to increase every time he causes another accident or gets another moving violation. Alternatively, your insurance company might decide to terminate your policy or exclude your son from coverage.
If you give permission to your high-risk driver son to use your car and he causes yet another accident, you might find yourself in a lawsuit. To prevent this, you might want to exclude him as a driver. That means he cannot drive your car. If he does drive your car, he did do without your permission. He effectively stole your car.
If your high-risk driver son causes an accident while driving your car after being excluded, it will be on him, not you. Your son, not you, might be sued and be on the hook for all costs to repair the other driver’s car and payment of medical expenses. If your son failed to buy minimum liability insurance required in Washington State, he will be considered an uninsured driver.
DOES MY CAR INSURANCE COVER OTHER DRIVERS WHO USE MY CAR?
Insurance companies know that most car owners periodically give permission to others to drive their car. Your car insurance policy presumes certain people will have permission to drive your car, including your children, significant others, spouses, relatives, and roommates. Your car insurance will cover all costs caused by these “permissive drivers,” as provided in your policy.
With the understanding that car insurance generally follows the car, regardless of who is driving, let’s assume your best friend is staying with you and borrows your car (without permission) to buy you some groceries. If your friend causes an accident, your car insurance will step up first to pay for damages, even if he has his own car insurance. Your insurance company may then go after your friend’s insurance company for the money it paid because of his negligence. If the matter can’t be resolved, you may find yourself in a lawsuit and paying higher car insurance premiums, not to mention the hassle of dealing with the lawsuit.
GET THE HELP YOU NEED IN THE TRI-CITIES AT AULTMAN LAW
Aultman Law has over 18 years’ experience representing insurance companies and their insureds handling car accidents, construction defect, general negligence, business disputes, and tort matters. We are a small law firm with big law firm experience!
Our law firm’s practice areas are personal injury law, business litigation, construction defect, and insurance defense. At Aultman Law, experience is the difference. If you would like more information or want to schedule a free consultation, I invite you to call me today at 509.282.2456 or complete our Online Contact Form.