Auto Insurance: Understanding Additional Driver Coverage

Whether you're lending your car to a friend or family member, or borrowing someone else's car, it's important to know whether you're covered by insurance in the event of an accident. In most cases, auto insurance follows the car, so your policy will typically be the primary policy, paying out first. If the person driving your car also has insurance, their policy will pay out second. However, this can vary depending on the specifics of the claim, such as the location of the accident and state laws.

Additional drivers and insurance as a secondary driver

When it comes to auto insurance, the primary driver is typically the person who owns or leases the car. However, this doesn't have to be the case. The primary driver is simply the person who uses the vehicle the most, and the base insurance premium is calculated based on their demographic factors and driving history. If you, as the owner, use the car less frequently than another person in your household, you would be considered the secondary driver.

Who Needs to Be Added to an Auto Insurance Policy?

As a rule of thumb, any licensed driver who uses your car regularly or lives in your household should be named as a secondary or occasional driver on your auto insurance policy. This could be a family member, roommate, or friend who borrows your car regularly, or even a nanny or personal care worker who uses your car for their job. Keeping your insurer updated will ensure that you remain covered in the event of an accident.

Who Doesn't Need to Be Added?

Only drivers that are expected to use your car on a regular basis need to be added to your auto insurance policy. This means you don't need to add a friend who needs your car for a one-time emergency or relatives visiting from out of town. These drivers are considered incidental and are borrowing your coverage as well as your car. However, if an unlisted driver gets into an accident, your insurance company may deny your claim.

Adding a driver to your policy will usually lead to a slight increase in premium costs. This is because each additional driver increases the chance that your insurance provider will need to pay out a claim. The change in cost will depend on the risk level of the driver being added. For example, adding a reckless or inexperienced driver, like a teenager, will likely cause your insurance costs to spike.

How to Save on Secondary Driver Insurance

You can save on secondary driver insurance by choosing your secondary driver wisely. Adding a low-risk driver can save you hundreds of dollars per month. Insurance companies also offer various discounts, so it's worth checking if you're eligible for any of these. Shopping around and comparing quotes from different insurance companies can also help you find the best deal.

Insurance for borrowing a car

Borrowing a car or lending your car to someone else can be a tricky situation when it comes to insurance. Here's a detailed guide on what you need to know about insurance for borrowing a car:

The answer to this question is not straightforward and can vary depending on several factors. In most cases, auto insurance follows the car rather than the driver. This means that the policy associated with the car will be responsible for accident-related damages, regardless of who is driving. However, it's important to note that every policy is different, and specific coverages may vary from insurer to insurer and policy to policy.

When you borrow a car from a friend or family member, their auto insurance policy will typically be the primary policy, meaning it will pay out first in the event of an accident. If you, as the borrower, also have your own insurance policy, it will serve as secondary coverage and pay out later. The same principle applies if you are renting a car from a rental car company or a car-sharing service; your insurance will cover you in addition to any insurance provided by the rental company.

When borrowing a car, the owner's insurance policy will generally cover most types of coverage, including liability, comprehensive/collision, and personal injury protection (PIP) or medical payments (MedPay). Liability coverage will protect you in case of injuries to people and damage to property when you are at fault in a crash. Collision and comprehensive coverage will pay for damages to the car in a crash, theft, or vandalism, regardless of who is at fault. Personal injury protection/medical payments coverage will cover medical expenses for you, the driver, and any passengers in the vehicle.

There are a few scenarios where insurance may not cover a borrowed car. If you are a "named excluded" driver on the owner's policy, their insurance will not cover you. Additionally, if you engage in activities that are against the terms of the owner's policy, such as unlicensed driving or using the car for criminal activities, you may not be covered. It's important to review the specific terms and exclusions of the owner's policy before borrowing the car.

If you are planning to borrow or lend a car, there are a few things to keep in mind. First, review the insurance policy and understand the specific coverages, exclusions, and state-specific laws. Discuss with the owner or borrower whether they will be responsible for any additional costs or deductibles in case of an accident. It's also important to ensure that the driver has a good record and is trustworthy. Keep in mind that if an accident occurs, it could impact insurance premiums and lead to legal consequences for both the owner and the borrower.

If borrowing a car is not an option or seems too complicated, there are alternatives to consider. One option is to add the borrower as a named driver on the owner's policy. Another option is to take out an annual policy on another vehicle and cancel it when it's no longer needed, although this may be more costly and impact the owner's no-claims discount in case of a claim. Temporary car insurance or short-term insurance is also an option, allowing you to drive a car for a short period without needing an annual policy. This can be useful for test drives, road trips, or borrowing a car from friends or family.

Insurance for lending a car

Lending your car to someone else can be a risky business, and it's important to be aware of how your insurance policy applies in these situations. In most cases, auto insurance follows the car rather than the driver, so your policy will be the primary policy, paying out first. The driver's insurance will pay out second, if they have their own policy.

If the person borrowing your car is a member of your household, you must notify your insurer. Failure to do so may result in your insurer refusing to pay in the event of a claim or reducing the compensation amount. If the driver is not a member of your household, you don't need to inform your insurer, and they will be covered under your auto insurance in the event of an accident. However, you will only be compensated for damages to your vehicle if you have collision insurance.

Before lending your car, it's a good idea to check the driver's license to ensure it is valid. If your car is involved in a major traffic violation or the driver is not in possession of a valid license, it could be seized, even if you were not driving. If the driver is in an accident, your insurance premium could increase.

In general, your car insurance will protect another driver when you loan them your car, as long as they have your permission. This includes liability protection, comprehensive/collision, and personal injury protection (PIP) or medical payments (MedPay). However, there are some scenarios in which your insurance will not cover another driver. These include:

• If they are a "named excluded" driver on your policy
• If they are engaging in commercial activities, such as delivering pizzas or driving for a ride-sharing company
• If they are paying to use the car, such as in a car-sharing arrangement
• If they are an unlicensed driver
• If they are borrowing your car to commit a crime

It's important to review your policy and understand the specifics of your coverage before lending your car to someone else.

Insurance for renting a car

Whether or not you need to purchase rental car insurance depends on your personal auto insurance policy. In most cases, your auto insurance policy will cover you for rental cars, but only for personal use. If you are renting a car for business purposes, check with your insurer or employer about the details of your coverage.

Your auto insurance policy will usually be the primary policy, meaning it pays out first. If you have rental car insurance, that will typically pay out second.

If you don't have a personal auto policy, you will need to purchase liability coverage through the rental car company.

Rental car insurance can include:

• Liability: Covers damages or injuries you cause while driving the rental.
• Loss/collision damage waiver: Releases you from responsibility for damage or theft to the rental car.
• Personal accident insurance: Protects against injuries to you and your passengers while driving a rental car.
• Personal effects coverage: Covers your personal items if stolen from a rental car.

If your personal auto policy includes liability, comprehensive, collision, and medical payments/personal injury protection, then you may not need rental car insurance. If you have a homeowners, renters, or condo policy, your personal belongings in a rental car should be covered too.

If you don't have comprehensive or collision coverage, you may want to consider purchasing a loss/collision damage waiver from the rental agency or your credit card company. This will protect you from theft, vandalism, and damage to the rental.

Some credit card companies provide insurance coverage if you use your card to pay for the rental car. Check with your credit card company for specific coverage information, rules, and restrictions.

Insurance for driving without permission

Driving without insurance is against the law in virtually every US state. The consequences of driving without insurance can vary, with penalties ranging from a fine to jail time. If you are caught driving without insurance, you can face fines, license suspension, registration suspension, and even jail time.

If a vehicle is taken without the owner's consent, the driver will not be held responsible for any damages. The policy owner will have to use their insurance to cover the damages to their vehicle. However, if the driver is a car thief, it is hard to prove that they did not have permission to drive the vehicle, and in this case, the owner's insurance will likely be liable.

In general, insurance follows the car, not the driver. This means that if you have permission to drive someone else's car, that person's insurance will cover any accident that may occur. If you live in the same household as the person whose car you borrow, you may need to be listed on that person's insurance policy.

It is important to note that there is no standard auto policy, and coverage will vary widely depending on who is driving and the specific circumstances. Some insurance coverage types follow the car, while others follow the driver. The specifics of a claim will depend on the insurance laws of the state, the policy, and the amount of coverage the policyholder has on their vehicle.

Before lending your vehicle to someone else, it is essential to review your insurance policy and understand the details and state-specific laws. It is also crucial to verify that the person borrowing your car has a valid driver's license and is a trustworthy driver with a good record.

Frequently asked questions