Does Car Insurance Follow The Car or The Driver?

Sometimes auto accidents happen. Sometimes they happen to friends or loved ones when they are driving your car. When someone you let drive your car hits another car with your vehicle, who does the insurance company claim is at-fault? Does your insurance follow the car or the driver?

Let’s start with some general rules:

  1. State laws require drivers to carry a minimum amount of liability coverage. If the person who borrowed your car is a legal driver, he or she must carry liability insurance.
  1. As the owner of the car, you may choose to carry comprehensive or collision coverage, in addition to the mandatory minimum amount of liability coverage. Comprehensive and collision will cover any damage to your vehicle, no matter who is driving it.

So, when your friend or loved one causes an accident when driving your car, in what position does this put you?

When the borrower has permission to use your car, the following will apply:

If he or she was driving your car and is at-fault for the accident, your insurance will kick in first. This is assuming that the borrower was using your car with your permission and that you did not explicitly exclude them from being covered under your auto insurance policy. The “Omnibus” clause in your policy provides coverage to anyone borrowing your car, as long as you gave them permission.

Furthermore, if the person borrowing your car is insured, his or her policy will kick in to provide secondary coverage for the accident he or she caused. The borrower’s insurance may cover medical expenses, personal liability and any damage leftover when the limit of your coverage is exceeded.

However, when the borrower does not have permission, your liability will be assessed as follows:

If the borrower did not have permission to borrow your car and causes an accident, you will not be responsible for damages, as long as the borrower was an insured driver. His or her insurance will provide primary coverage and your insurance may kick in to cover damage to your personal vehicle.

On the other hand, if the borrower is not insured, you could be in big trouble. You will assume primary liability for the accident that he or she caused. If this exceeds the limit of your liability insurance coverage, you could be sued for any unpaid damages. So, to protect yourself, you should make sure that you never give someone whom you do not trust, or someone whom you have explicitly excluded from your policy, access to your car.

An Experienced Indiana Car Accident Attorney

If you or a loved one has been involved in a car accident, allow us to put our years of experience and knowledge to work for you. Contact Jacobs Law, LLC online or call us today toll-free at (317) 794-2024 to schedule your free, comprehensive case evaluation. We have been assisting injured victims and their family members in recovering damages for their injuries for more than a quarter of a century. We can help determine if you are eligible to seek compensation for your injuries and losses.