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UPDATED: Mar 13, 2020
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Whether you’re a college student borrowing your parent’s car, a friend swapping driving shifts on a long road trip or a designated driver coming home from a party, sometimes the occasion arises when you need to drive someone else’s vehicle. Most of the time, this happens safely and there are no concerns. Sometimes, however, accidents occur; if you’re driving someone else’s vehicle, it’s important to understand how your insurance will handle the damage that occurs to the car and any injuries sustained in the accident.
Damage to Non-Owned Vehicles
In most cases, auto insurance follows the vehicle, not the driver. This means that if you are in an accident in another person’s car, that person’s insurance will cover the damage to the vehicle. On the one hand, this is good because it means that damage is covered regardless of the person driving it. On the other hand, this can cause some complications as a person will still be found liable for an at-fault accident, no matter who is driving. This means that you can cause another person’s car insurance rates to go up due to an accident you cause.
The owner of the vehicle will also be responsible to pay the deductible on the policy. If you choose, you can opt to pay this deductible yourself out of pocket, but your insurance company will not be responsible for these funds in most cases. Usually your insurance company will only become involved in the claim if the other driver’s insurance is exhausted; if they do not have sufficient insurance to pay for the extent of the claim, your insurance may be able to cover the difference.
All insurance does not function the same way in regards to non-owned vehicles. Policies differ from one country to the next as well as from state to state. Some states, such as Texas, allow a driver to decide whose coverage should apply to the loss. Many places allow a driver’s liability coverage to pay damage caused in an accident in excess of the vehicle’s own coverage.
Alternatively, some car insurance companies will only pay for claims to a car if the vehicle is being driven by a listed operator on the policy. For these policies, it doesn’t matter whether or not someone had permission to use the vehicle: All drivers are considered excluded from the policy unless they are specifically listed on the insurance. This occurs with some types of low-cost insurance as well as high-risk auto insurance companies. If you’re not sure if your policy excludes unlisted drivers, you can ask. This becomes especially important in households with teenage children who have access to the household vehicles, but is essential to know any time someone not on your policy could drive your car.
Before allowing anyone to drive your vehicle, it’s important to know exactly how your coverage will handle an accident caused by an unlisted driver. No matter who drives your car, you should always maintain enough insurance on the vehicle to cover any damage that could be caused in an accident in order to protect yourself.
Injuries are handled differently by most insurance companies than damage. Generally, if you are driving another person’s vehicle and you sustain injuries as a result of an accident, your own car insurance will pay for your injuries. The coverage that applies will be either personal injury protection (PIP) or medical payments (medpay) coverage, depending on what you carry on your policy. This coverage pays for injuries sustained in a car accident regardless of who was driving and who owns the vehicle.
In situations where you drive a non-owned vehicle and have passengers with you, the injury coverage for those passengers could potentially come from your own liability coverage, the liability coverage of the vehicle you’re driving and the PIP/medpay of the passenger. This type of claim can quickly become complicated, but usually the insurance companies will work out the details of payment after the claim has been initially handled.
While sometimes borrowing another person’s vehicle is unavoidable, it does pose a unique set of risks. Before allowing anyone to drive your car, you should speak with your insurance company or local agent to determine exactly how your coverage is handled in the event of an accident with an unlisted driver.