A question frequently asked about car insurance is whether the policy protections follow the car or the driver. As with many insurance questions, there is no black/white answer, but in most cases the answer is that the car insurance follows the car, with a few specific exceptions that will be covered here.
What if You Lend Your Car and it Gets Damaged?
A good example of your car insurance following your car is if you lend it out to a friend and they damage it in an accident. Assuming you have collision coverage in your policy, your insurer should cover the claim just as though it was you driving the vehicle at the time of the incident. There are a few exceptions to this rule:
- If someone uses your vehicle without your permission, called non-permissive use, your insurance won’t cover any damage done while they’re driving.
- If you allow someone to use your car and they use it for commercial purposes (such as a ride-share or delivery job) you won’t be covered for any damage done to your vehicle.
- Anyone driving your car without a license or with a suspended license won’t be covered by your vehicle insurance.
- If someone is an excluded driver on your policy, your insurance won’t cover any damage done while they’re driving. Deeming someone an excluded driver, however, is not permitted in nine states in the U.S., with North Carolina being one of these.
Primary or Secondary?
When someone else is driving your car with your permission and something happens that requires you to submit a claim, your insurance is considered to be the primary insurance coverage and should pay the claim in much the same way as if you were driving. If the person who borrowed your car has their own coverage on their personal vehicle, this would be considered secondary insurance coverage. In the event they cause an accident and damages exceed your policy limits, their policy should pick up where your policy leaves off. This is assuming that their policy includes the appropriate coverages.
Rental Car Coverage
Depending on the specifics of your personal car insurance policy coverage, you may already be covered when you rent a car. That means you may not need the optional coverage they offer at the car rental counter. Certain credit cards also provide you with rental car insurance coverage. Read your documents to be sure.