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Does Insurance Follow the Car or the Driver?

does insurance follow the car or the driver

There are over 6 million motor vehicle accidents per year. Yet, not all of them will involve a car’s owner or insured drivers. Some are test drives or family and friends borrowing a car.

Who is insured or covered in a car accident involving a borrowed car and who isn’t? Are repairs covered? What about liability and other insurance?

So, does insurance follow the car or the driver? Keep reading to get answers to these questions.

When Aren’t You Covered?

The situations you aren’t covered generally fall into three categories. Those categories are:

  • Excluded drivers
  • Commercial activities
  • Paid car-sharing

Your insurance often doesn’t extend to others while they’re paying for the privilege of using your car. This is an example of renting your car out to a car-sharing company. The company will need to have its own insurance, and you’ll need to take out supplemental or commercial auto insurance.

If you use your vehicle for deliveries or Lyft, Uber, and other ride-sharing apps, you’ll need an insurance policy that covers those activities.

Excluded drivers aren’t only people that are not listed on your insurance, but they are specifically listed as not covered by your insurance. This is an important distinction. Some states do have minimal coverage, though.

Each insurance carrier has different rules for all of these scenarios, and your policy needs to be inspected carefully.

Dealing With a Car Accident While Driving Another Car

If people are named on your insurance, like those in the household, you’re golden. In most cases where you have permission to drive a vehicle, but you’re not named on insurance, you’ll be at least partially covered. Such as, if you get in an accident while:

  • Borrowing a car from friends or family
  • Renting a car from a car-sharing marketplace or rental company

This assumes you got consent to drive the vehicle. What will likely not extend to these cars is your full coverage. Liability coverage is one of the only things that may carry over to other vehicles.

That means that comprehensive or collision insurance coverage likely will not carry over. However, the insurance on the car that the car owner has likely will cover some or all of the damage.

It’s important to get the answers from your insurance agent for details of your specific policy, or your family member’s policy, ahead of time to know what and where your policy gaps are.

In the case where occasional or frequent sharing of cars happens, it’s worthwhile to look into adding each other to your existing policies. If this sharing is for business purposes, looking into a commercial policy or supplemental insurance is also a good idea.

Answered: Does Insurance Follow the Car or the Driver?

So, does insurance follow the car or the driver? As you can see, the answer depends on a number of factors.

It’s important to check with your insurance carrier to find the answers. It’s difficult to wade through policies, but you’re in luck if you have an insurance agent like Insured ASAP!

Insured ASAP Insurance Agency has experience dealing with commercial and personal policies, excluded drivers, supplemental insurance for ride-share, and many other situations. We can help you find the right policy for your needs.

Contact us as soon as possible to find answers to any questions you have regarding your policy!

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