Auto Insurance: Who’s Covered

Now that summer is here, you may be planning a road trip with a friend and want to share time in the driver’s seat. But, how do you know who’s covered on the auto insurance policy? Does the policy follow the driver or the vehicle?

Insurance policies can vary, but most will cover everyone in your household unless expressly excluded on the policy. If you let a friend or family member who doesn’t live with you occasionally share the wheel, don’t worry. Permissive use generally applies, which means that if you allow someone to drive your car, they’ll be covered by your vehicle’s insurance coverage.

Generally, insurance coverage follows the vehicle rather than the driver. In most instances, as long as the owner of the car has insurance, the vehicle is covered even if someone other than the owner is driving it—as long as the borrower has the owner’s permission.

The borrower’s insurance is considered secondary, meaning that in the event of an accident, it could apply if your insurance is insufficient to fully cover the damage.

It’s important to note that there are some exceptions to what is called “permissive use” coverage. For example, permission must be given by the owner, unless the borrower has a reasonable belief that they are allowed to use the car. However, the borrower cannot give permission to someone else. So if your teenager allows one of his or her friends to drive your car, your coverage likely won’t apply.

Coverage might also be denied if the borrower operates the vehicle in a negligent or criminal manner. And if the borrower is using your car for business purposes, your personal auto policy likely won’t cover that.

If you have a regular long-term arrangement to either borrow or lend a car, the borrower should probably be added to the owner’s personal auto policy. Those who don’t own a car, but often borrow one, might also consider “named non-owner coverage,” an endorsement that provides bodily injury and property damage liability, uninsured motorists coverage and more.

Ultimately, it’s usually safe to let your friend drive your car for occasional use, such as a road trip. And the same goes for borrowing someone else’s car. Just make sure it’s for “normal” use. You’ll want to confirm that the car has coverage and that your insurance, whether you’re the owner or borrower, will apply.

Information in this article is general in nature and for your consideration, not as financial advice. Please contact your own financial professionals regarding your specific needs before taking any action based upon this information.

Article prepared by Safeco Insurance. Copyright 2019; May 2019

RBFCU Insurance Agency LLC is a wholly-owned subsidiary of RBFCU Services LLC. RBFCU Services LLC is affiliated with Randolph-Brooks Federal Credit Union (RBFCU). Insurance products are not deposits; are not obligations of the credit union; not NCUA insured; and not guaranteed by RBFCU Insurance Agency LLC, RBFCU Services LLC or RBFCU.