If i drive someone elses car whose insurance pays

Question:

I borrowed my friend's car and got in a minor accident, which was my fault. Will my friend's insurance policy pay for the damages to the other vehicle?

Answer:

Yes, most likely. Drivers occasionally operate cars that aren't their own. Almost all states require car owners to buy liability coverage, which covers damage to the other car if you're at fault in an accident when driving someone else's vehicle—so long as you're not excluded from coverage. In your case, your friend's liability insurance will likely pay to repair the damages to the other driver's car. To find out, check the policy and contact the agent if you haven't done so already. (If your friend's insurance gets maxed out, your insurance policy would be tapped as secondary coverage. But because you said the accident was minor, this probably won't happen.)

In the meantime, here's some basic information about what kinds of drivers and vehicles are usually covered by liability policies and optional insurance policies. Liability coverage is generally similar from policy to policy, though optional coverage varies greatly. (To learn more about the different types of automobile insurance coverage, see Buying Insurance for Your Car.)

Liability Coverage

If you cause an accident that damages someone else's car, "property damage" liability coverage usually pays for repairs to the other vehicle. Most states require car owners to have liability insurance, though a few states allow owners to forego insurance if they can show that they have the financial resources available to pay damages after an accident. But even when liability insurance is in place, disputes sometimes come up about whether the driver or vehicle in the accident is included or excluded from the policy. Here are the usual inclusions and exclusions.

Drivers. In addition to the driver named on the policy, liability coverage usually includes any licensed driver who is:

• the insured's spouse or life partner
• related by blood, marriage, or adoption and lives with the insured, or
• temporarily driving the vehicle with the insured's permission.

Vehicles. In addition to the vehicles identified in the policy, liability coverage typically covers:

• any vehicles the insured acquires (owners often have to notify the insurance company within a specific time period when additional vehicles are acquired), and
• any vehicle the insured is temporarily using when his or her own vehicle is unavailable. (So, additional liability insurance might not be necessary when renting a vehicle in the United States.)

Optional Coverage

Collision, comprehensive, and other optional coverages that the insured chooses cover the vehicles identified in the policy when operated by drivers identified on the policy. Some policies also cover spouses and family members who aren't listed, but other policies do not. Policies differ significantly regarding the applicability of optional coverages when insured vehicles are driven by third-parties not listed on the policy. Accordingly, owners should check their policy or contact their agent when someone not listed on the policy will be driving their vehicle. (To learn more about optional car insurance, see What Kind of Car Insurance Do I Need?)

Get More Information

For in-depth information about cars and driving, get Nolo's Encyclopedia of Everyday Law, by the Editors of Nolo. This guide also has lots of information about general legal topics.

Whether or not auto insurance follows the car or the driver is a common question and also a commonly misunderstood scenario.

Let's say you've done your homework and found a good insurance rate for a good policy from a good insurance carrier. You're a safe driver with a clean record, so your friend lends you their car for the weekend. Or vice versa—you lend your safe-driving, clean-record friend your car for the weekend. In the event of a collision: Whose insurance is responsible for covering it? The one who owns the car, or the one who was driving the car?

Generally speaking, auto insurance follows the car instead of the driver. Follows the car, meaning: if you lend your friend your car and your friend gets into a collision, your insurance would cover it, and if your friend lends you their car and you get into a collision, your friend's insurance would cover it.

However...there can be exceptions to this rule depending on the situation and the type of insurance coverage.

Since it's easiest, in this case, to spell out the exceptions to the rule, let's look at the scenarios where the insurance would follow the driver instead of the car.

Insurance follows the driver if:

1. The insurance carrier of the person who lends the car only covers drivers specifically named in the policy.

   Usually you would need to explicitly exclude drivers on your policy for them not to be covered (in which case, it would seem odd you would lend your car to someone you exclude anyway, but that's beside the point). However, there are some insurance companies that need all drivers to be specifically named/included on a policy if they are to be covered.

   In general, though, your insurance will cover any person who you've given permission to drive your vehicle, including family members living with you and your dependent children away at school.

   It is important to note that insurance companies do generally expect any family members living in your household who will be driving your car on a regular basis to be specifically named and included as drivers in your policy.

2. The coverage limits of the person who lends the car have been reached.

   In the case where the amount needed to repair damage from a collision exceeds your insurance policy's "limits"—that is, the maximum amount the policy will pay for repairs—then the driver's coverage policy might have to step in to cover what yours can't.

   Of course, this only applies to situations where the driver's coverage limits are higher than the car-lender's coverage limits.

3. It's clear that you didn't give permission.

   If it's clear you didn't provide permission for someone else to drive your car and a collision occurs, then the driver's insurance would be responsible for coverage. This would of course be the case if your car was stolen and a collision occurred.

4. We're talking about personal injury and medical expenses.

   In most cases, the driver's insurance policy will be the one to have to cover any personal injury (on the part of the driver) or medical expenses. However, if the passengers in the vehicle don't have coverage of their own, your policy may be liable for their medical expenses and personal injury.

A Final Note

Remember that all of the above only applies/matters if the driver you lent your car to is at fault in the collision. If the driver ins't at fault, you won't have to worry about your insurance taking a hit. You would file a claim with the at-fault party's insurance and receive coverage for any damages to your vehicle.

But also remember that the driver is uninsured and is at fault in the collision, you could be liable not only for damages to the car but also the damages to the other car (or cars) involved in the collision, in addition to all medical expenses of those injured in the collision.

That's why, whenever you lend your car out, it is essential to:

1. Review your policy's coverage, including its limits and wording around driver permissions.
2. Make sure the person you are lending your car to is covered and review his/her policy, as well.
3. Only lend your car to people you know well and whom you know are safe drivers.
4. Don't lend your car out for extended periods of time or for long, inter-state or international trips, as this will increase the odds of a collision and could change the coverage situation if the state's or country's rules are different from those of your own state/country.

No matter what you do in this situation, having a solid insurance policy is key.