Auto Insurance: Insuring The Vehicle Or The Driver?

Auto insurance can be a complicated topic, with many variables determining whether insurance follows the vehicle or the driver. Generally, auto insurance follows the vehicle, but some types of coverage follow the driver. The variables that determine whether coverage follows the driver or the vehicle include the insurance laws of the state, the policy type, and the coverage within the policy.

Auto insurance typically follows the car, not the driver

However, it's important to note that every policy is unique and is based on multiple factors as well as state insurance law. For example, if the person borrowing your car is not listed on your auto insurance policy, the issue of whether they are covered becomes murkier. Typically, whether the policy provides coverage in these situations depends on consent. If other people drive your car with your permission, then they should be covered under the terms of your policy.

On the other hand, if someone borrows your car without your permission, your insurance may still cover any damage, but the driver's insurance may be responsible for the damages and injuries resulting from the accident. This is known as "non-permissive use".

If you are driving someone else's car, the car owner's policy will generally be used to pay claims related to an accident while you are behind the wheel. However, if their insurance is not enough to cover damages, your own policy may be used to pay for amounts over their limits.

Liability insurance follows the driver

In general, car insurance follows the car, not the driver. This means that if you borrow someone else's car and get into an accident, your auto insurance rates are likely to rise, not the car owner's. However, there are exceptions to this rule, and it ultimately depends on several factors, including the names listed on the auto insurance policy and whether the owner gave explicit permission to the borrower to drive the vehicle.

If you are listed on the car owner's insurance policy, you will typically be covered when driving that car, even if it's not your own. This is known as "permissive use," and it means that unlisted drivers will have coverage while driving the policyholder's vehicle with their permission. However, the extent of this coverage may vary depending on the insurer and the state you live in.

It's important to note that your full coverage might not extend to a rented or borrowed vehicle. Your liability coverage will generally apply to the car, but comprehensive and collision insurance coverage may not. Therefore, it's recommended to check with your insurance agent to determine the extent of your coverage and explore optional coverages like Accident Forgiveness and Minor Violation Forgiveness for added protection.

Collision and comprehensive insurance follow the car

While auto insurance generally follows the car, there are exceptions. Collision and comprehensive insurance are tied to the insured vehicle and follow the car. This means that if you loan your vehicle, you also loan your car insurance.

Collision coverage helps pay for damage to your vehicle if your car hits another car or object, gets hit by another car, or if your vehicle rolls over. It also covers damage caused by potholes. The average cost is about $290 per year. Collision coverage reimburses you for the costs of repairing your car, minus the deductible.

Comprehensive coverage, on the other hand, covers damage to your car caused by disasters "other than collisions". This includes damage from contact with animals, natural disasters, theft of the entire car or parts of the car, and fallen objects. The average cost of comprehensive coverage is a little over $134 per year.

If you have collision and comprehensive insurance and someone else is driving your car, this coverage can pay for your car repairs even if you weren't driving at the time. However, if someone other than the insured drives a car with comprehensive coverage and isn't designated as a covered driver, they may not be protected in an accident. It's important to carefully read your policy to understand the specifics of your coverage.

Whether a driver is covered by insurance depends on the policy and the state

The insurance coverage can vary depending on the insurer, the policy, and the state. Some policies may cover the driver, regardless of the vehicle they are driving. This is often the case with liability insurance, which follows the driver and provides coverage for medical bills and vehicle repairs for the other person in the event of an accident. On the other hand, comprehensive and collision insurance are usually tied to the insured vehicle and follow the car.

It is worth noting that the coverage provided to other drivers operating your vehicle may depend on whether they are listed on your policy. Typically, your car insurance will cover other drivers if they are listed on the policy, such as your spouse, parents, siblings, or children. For individuals not listed on your policy, such as friends or extended family members, the coverage may depend on consent. If you have given them permission to drive your car, they may be covered under your policy.

Additionally, certain scenarios may impact the coverage provided. For example, if you are using your vehicle for commercial purposes or renting it out to a car-sharing company, your insurance policy may not cover incidents occurring during these activities. Excluded drivers, who are specifically listed on the policy as not covered, will typically not be covered when driving under your policy.

In conclusion, whether a driver is covered by insurance depends on a combination of factors, including the specific policy, the state's insurance laws, and the circumstances of the incident. It is important to carefully review your insurance policy and understand the coverage provided to ensure you are adequately protected.

If a driver is excluded from a policy, they won't be covered

An excluded driver is a household member who has been explicitly removed from coverage under your car insurance policy. Their name will appear as "'excluded" on your policy, and they won't be insured to drive any vehicles on your policy. Excluding a driver from your policy means they are not covered by your insurance in any circumstances.

If an excluded driver gets behind the wheel of your car and causes an accident, your insurance company likely won't cover any losses, and you could be held liable for damages. In this case, the excluded driver will be regarded as an uninsured driver and face liability for all damages and injuries resulting from the crash.

It's important to note that not all states allow policyholders to exclude household members from coverage. Some states prohibit named-driver exclusions altogether, while others may require excluded drivers to have their own auto insurance before they can be excluded from your policy. Check with your state's insurance regulations and your insurance provider to understand the specific rules and requirements for excluding a driver.

When deciding whether to exclude a driver from your policy, consider the potential risks and consequences. While excluding a high-risk driver can help lower your insurance premiums, it also means that person will not be covered by your insurance if they drive your car, even in an emergency. If they cause an accident, you may be financially responsible for the damages.

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