Alyssa Lane
Car insurance is a complicated topic, and it's important to understand the different types of coverage available. In general, auto insurance follows the car instead of the driver, but there are choices in coverage that follow the car and some that follow the driver. The specifics of a claim can differ since insurance laws and coverage vary depending on the policy selected and the state in which the driver resides. For example, liability insurance is the only insurance legally required in Texas, whereas nearly all states require a minimum amount of liability insurance. This portion of insurance covers the costs associated with injuries, death, or property damage caused by the driver.
What You'll Learn
The insurance follows the car, not the driver
The concept of insurance following the car and not the driver is known as "permissive use". This means that you give someone who isn't listed on your car insurance policy permission to operate your vehicle. If they're involved in an accident, your auto insurance may pay for the damages and injuries, up to your coverage limits. However, this depends on the type of insurance you have, and the driver's insurance could also pay out, depending on their policy and the details of the accident.
In the case of permissive use, your liability coverage will generally extend to the car, but comprehensive insurance coverage and collision insurance coverage may not. If you're in an accident while driving a borrowed vehicle, the owner's car insurance may provide some coverage. It's important to check with your insurance agent to determine how you are covered and what your auto policy limits are.
The specifics of whether insurance follows the car or the driver vary from insurer to insurer and policy to policy. In some cases, insurance can follow the driver no matter whose car is being operated, provided it is an eligible vehicle. This is particularly true of liability insurance, which covers damage to another vehicle or property. Collision and comprehensive insurance, on the other hand, are tied to the insured vehicle and thus follow the car.
While permissive use typically covers drivers who are not listed on your policy, there are some exceptions. For example, if the driver borrowed your car without permission (known as "non-permissive use"), their insurance may be responsible for the damages and injuries resulting from the accident. Additionally, if the driver of your vehicle is not at fault for the accident, the at-fault driver may be responsible for the claim.
It's important to note that requirements and regulations may vary depending on your state and insurer. In some cases, you may be required to list any drivers that live at your permanent residence on your policy, regardless of how often they drive your car. Even if they don't live with you, they should be added to your policy if they regularly drive your vehicle.
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Liability insurance covers the driver
Liability insurance is a crucial aspect of auto insurance, providing financial protection to drivers in the event of accidents. While car insurance typically covers the vehicle rather than the driver, liability coverage focuses on safeguarding the driver's finances if they are responsible for injuries or property damage. This type of coverage is mandated by most states to legally operate a vehicle.
Liability insurance serves as a safety net for drivers by covering the costs associated with property damage and bodily injuries caused by the insured driver. This means that if a driver damages another person's car or property, their liability insurance will pay for the repairs or replacement, up to the chosen coverage limit. Similarly, if someone is injured due to the insured driver's actions, liability insurance will cover the medical expenses of the injured party. This coverage extends to passengers in the insured driver's vehicle, pedestrians, and occupants of the other vehicle involved in the accident.
When purchasing liability insurance, drivers have the option to select their coverage limits. These limits are usually presented as a set of three numbers, such as 25/50/10 or 100/300/50. The first number represents the maximum amount covered for bodily injury per person, the second number indicates the coverage per accident, and the third number denotes the limit for property damage per accident. It is recommended to choose coverage limits that match or exceed the driver's total net worth to ensure their assets are adequately protected.
In addition to the standard liability coverage, drivers can also opt for supplemental spousal liability insurance. This is important because, in most cases, the auto insurance policy will not provide liability coverage for injuries to the insured driver's spouse. By purchasing supplemental spousal liability insurance, spouses can be included in the coverage, ensuring they are protected in the event of an accident.
Furthermore, liability insurance also comes into play when dealing with uninsured motorists. If a driver without insurance causes an accident, they may be held liable for the injuries and damages they inflict beyond the limits of the insured driver's policy. This underscores the importance of carrying adequate liability coverage to protect oneself financially in such situations.
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No-fault insurance covers the driver
No-fault insurance, also known as Personal Injury Protection (PIP), is a type of insurance coverage that pays out regardless of who is at fault in an accident. It is designed to cover economic losses, including medical expenses, lost earnings, and other necessary expenses related to injuries sustained in an accident. The purpose of no-fault insurance is to ensure that individuals injured in car accidents can quickly recover and return to productivity.
In most states, when an accident occurs, one party is typically considered "at-fault" and is responsible for covering the injuries and damages of the other driver and their passengers, usually through their liability insurance. However, some states, known as "no-fault" states, have a different system. In these states, any injuries suffered in an accident are covered by each driver's own personal injury protection coverage, rather than the at-fault driver's insurance. This means that drivers in no-fault states must purchase car insurance with PIP coverage to pay for their own injuries in an accident.
No-fault insurance provides prompt payment for medical expenses, lost earnings, and other reasonable and necessary expenses for the driver and passengers injured in a car accident, as well as pedestrians injured by the car. The basic no-fault coverage in New York State, for example, provides up to $50,000 per person. It is important to note that no-fault insurance does not cover damage to the vehicle, which is typically covered by the at-fault driver's insurance.
No-fault insurance also has implications for lawsuits arising from auto accidents. In no-fault states, lawsuits can only be filed for economic losses that exceed the no-fault insurance benefits or for non-economic damages, such as pain and suffering, if a "serious injury" as defined by insurance law is sustained. Additionally, no-fault states may allow drivers who suffer severe injuries to sue the at-fault driver if certain conditions are met.
It is worth noting that no-fault insurance does not apply to motorcycle operators or passengers. If a motorcycle is involved in an accident, the injured person may need to sue for losses, and if a pedestrian is struck by a motorcycle, they should file a claim with the insurer of the motorcycle.
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Uninsured motorist coverage
The amount of uninsured motorist protection required varies depending on your location. In some states, such as Massachusetts and South Carolina, only uninsured motorist coverage is mandated, while others may require a combination of uninsured and underinsured motorist coverage. Additionally, certain states may mandate a deductible for uninsured property damage coverage, but uninsured bodily injury coverage typically does not include a deductible.
It is worth noting that uninsured motorist coverage is not mandatory in all states. However, even if it is not required in your state, driving without it poses a significant risk. According to statistics, a notable percentage of drivers across the country do not have auto insurance, and you never know when you might encounter one of them on the road.
To summarize, uninsured motorist coverage is a valuable addition to your auto insurance policy, providing financial protection in the unfortunate event of an accident with an uninsured or underinsured driver. It ensures that you and your passengers receive the necessary medical attention and that your vehicle repairs are covered without incurring out-of-pocket expenses.
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Adding other drivers to your policy
Most insurance companies allow, and some even require, you to add another driver to your car insurance policy if the person drives the insured cars regularly or shares the same permanent residence. Some states may also require you to list any drivers that live at your permanent residence, regardless of how often they drive your car. This is because, in the event of an accident, your insurance company will cover the damages. If an uninsured driver who lives with you but is not listed on your policy borrows your car and is involved in an accident, they may be denied coverage.
When adding a driver to your policy, you will typically need to provide the driver's name, date of birth, driving history, license information, and their vehicle identification number (VIN) if you plan to share a car. The cost of adding a driver to your policy varies based on factors like the driver's age and their motor vehicle record. For example, a driver with a history of insurance claims and traffic violations may increase the cost of your policy. Conversely, many insurance companies offer discounts for teen drivers or good students.
It is important to note that car insurance generally follows the car and not the driver. This means that if you allow another licensed driver to borrow your vehicle, known as "permissive use", your auto insurance may pay for the damages and injuries up to your coverage limits. However, if the driver is also insured, their auto insurance could also pay out, depending on their policy and the details of the accident.
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Frequently asked questions
Car insurance generally follows the car and not the driver. However, there are exceptions, and the specifics of a claim can differ as insurance laws and coverage vary depending on the policy selected.
Permissive use is when you give someone who isn't listed on your car insurance policy permission to operate your vehicle. If they're involved in an accident, your auto insurance may pay for the damages and injuries, up to your coverage limits.
Non-permissive use is when a driver borrows your car without permission. In this case, the driver's insurance may be responsible for the damages and injuries resulting from the accident.
Liability insurance is the only insurance that is legally required in almost all states. It covers the costs associated with injuries, death, or property damage caused by the driver.
No-fault insurance, also called Personal Injury Protection (PIP), pays for economic losses such as medical expenses, lost earnings, and other reasonable and necessary expenses related to injuries sustained in an accident, regardless of who is at fault.
