What Can Happen When Someone Else Drives Your Car?

Let’s say a family member or friend who has a Driver’s License asks to drive your car. You trust this person and think he or she is responsible but an hour later, you get a call – they hit another vehicle. As the car owner, what does this mean for you?
Contrary to popular belief, insurance follows the car – not the driver. As such, when someone borrows your vehicle and gets into a collision, you’re nearly always responsible for the damage. In response, you’ll have to file a claim with your insurance carrier and a few months down the road, your rates may increase.
Before you hand over your keys to another driver, here’s what you should know.
Permissive Use and Approved Users
Who else is on your auto insurance policy? Generally, your car insurance covers everyone in your household – even dependents away at college – unless you specifically exclude them. This provision is called an “omnibus clause”. Although their coverage is implied, carriers still recommend listing exactly who is allowed to drive your car. In certain states, if a permitted driver was operating someone else’s vehicle, some carriers have reduced coverage in the event of an accident.
What do you do if a friend wants to borrow your car? Assuming this person asked you rather than taking your keys without permission, the individual does not need to be added to your policy. As the vehicle owner, if gave your approval, your coverage applies – even when an accident occurs.
These details may sound straightforward – until a collision takes place. At this point, understand:

• Your insurance is primarily responsible for the damage, so you’ll have to file a claim through your carrier and pay the deductible – even though you weren’t driving.
• However, the driver isn’t off the hook. Assuming your friend or family member is insured, his or her coverage is considered secondary. In this case, their policy may go toward personal liability and medical expenses. If the damage exceeds your limits, theirs may cover the rest.
• What happens if this person is not insured? Unfortunately, regardless of your policy’s limits, you’ll be on the hook for all damages. If that goes beyond your policy’s limits, the injured driver may file a lawsuit for medical fees and property damage costs.

Your Car Is Taken Without Permission
Let’s say someone drives your car without your permission. Are you still responsible and, if so, for how much? If it’s clear cut – for instance, your car gets stolen – your carrier won’t hold you accountable for the accident, but your policy can still be used to cover the damage done to your vehicle. On the other hand, the same scenario involving a person you know becomes less clear. If you can prove the car was taken without your consent, their policy becomes the primary source of coverage and yours secondary – unless they don’t have coverage, in which case you’re fully responsible. In this instance, unless you’ve intentionally excluded someone, permission for friends and family members is implied. Therefore, you’ll have to prove you didn’t consent to their use of your vehicle.
Excluded Drivers
In nearly all states, you have the option to exclude certain drivers from your policy – even if they’re family or live in your household. When this individual takes your car and an accident occurs, how does this affect you?

• If you gave the driver permission, both you and the driver are responsible for the damage.
• If your car was taken without your permission, you won’t be held responsible in most states.
• What happens if you live in a no-fault state? Although you won’t be responsible for personal injury, insurance-wise you and the excluded driver may be on the hook for personal liability. If the damages exceed the excluded driver’s coverage, you may both be held responsible for the remainder.

Traffic Violations
Aside from insurance coverage, how does the accident affect your driving record? Generally, if the driver was speeding or received a ticket for another moving violation, that incident goes on his or her driving record and will be excluded from yours. As such, they’ll be expected to pay fines, appear in court and could see their insurance rates go up as a result. Do you need to update your auto insurance policy? Whether you’re adding or excluding someone, this information should be explicitly stated. To start, give us a call at 203.439.2815.