Does Auto Insurance Follow the Car or Driver?

Does auto insurance follow the car or the driver? In most cases, insurance follows the car, not the driver. Because insurance companies insure the car itself, not the person. In the case of comprehensive and collision coverage, car insurance only follows the vehicle regardless of who is driving. However, liability coverage can follow both the driver and the vehicle, depending on the type and extent of the damage (Property Damage or Bodily Injury).

If someone borrows your car, your auto insurance policy usually applies first. But there are exceptions. Sometimes, the other driver’s insurance coverage may also take effect (if have any) if your policy limit exceeds the damage.

If you let someone drive your vehicle, how your automobile insurance covers other drivers is something important to understand. If a friend or family member gets into an accident while driving your vehicle, your insurance company may need to cover the damage.

Many factors determine how insurance companies handle claims. State laws, liability coverage, the insurance company, whether the person driving your car has your consent, and auto policy terms, all play a part. You need to clearly understand these factors to avoid any confusion.

In this article, we’ll discuss when insurance covers the car or the driver. We’ll also cover rental cars, borrowed cars, collision and comprehensive coverage, and what happens if an uninsured person drives your vehicle.

When Does Auto Insurance Follow the Car?

As we mentioned earlier, in most cases, auto insurance follows the insured vehicle, not the driver. This means your auto insurance policy covers damages if someone borrows your car with permission. This is also known as “permissive use”.

Whether it’s a friend, family member, or someone else, your insurance company is typically the first one to come forward to pay if an accident happens.

However, coverage depends on your insurance coverage and state laws. Some policies may have restrictions. If the driver isn’t listed on your car insurance policy, your insurer might limit coverage or deny the claim. 

How Does Liability Insurance Follow the Car?

Liability coverage protects others if your insured vehicle causes property damage or injuries. If someone drives your vehicle and causes an accident, your auto insurance policy will typically pay for the damages to the other party.

This applies even if you weren’t driving. As long as the driver has permission, your insurance company will handle claims up to your policy limit. However, if damages exceed your coverage, the insurance policy of the person behind the wheel might help with additional costs.

Nevertheless, if the person driving is excluded from your insurance policy, your insurer might deny the claim. That’s why you should check your auto insurance coverage before you let someone borrow your vehicle.

In brief, in the case of liability insurance, car insurance usually follows the driver instead of the vehicle. This means the person is covered no matter what vehicle they are driving, as long as they have consent. However, when it comes to physical damage coverage, it will follow the car. 

How Do Collision and Comprehensive Coverage Apply to the Car?

Collision and comprehensive coverage are often referred to collectively as “full coverage car insurance.” These coverages only protect your insured vehicle, not other cars or drivers. If someone else drives your car and hits another vehicle, or stationary object, your collision coverage will pay to cover the damage.

Comprehensive coverage pays for non-collision incidents like theft, fire, vandalism, collision with animals (e.g., deer), or weather damage (e.g., floods, storms, hail). Even if no one is driving, your insurance company will still cover these losses.

If your deductible is high, you might have to pay for the damages before coverage kicks in. In case you don’t encounter any unexpected situations, reviewing your insurance coverage would help.

Please note that, aside from these three coverages, there are various types of car insurance coverage that a policyholder might have. Each one operates according to its own terms and conditions.

When Does Auto Insurance Cover the Driver?

While auto insurance follows the car, there are times when it protects the driver instead. If you drive a rental car or someone else’s insured vehicle, your auto policy may provide coverage. 
However, this depends on your:

• Car insurance company
• Policy limits
• The laws of the state you’re residing in

If your insurance coverage includes collision and comprehensive coverage, you might have protection when driving a different vehicle. But not every insurance policy offers this. Some only cover the cars listed in the policy. 
Before you assume you’re covered, check your auto insurance coverage. Otherwise, you might end up paying for unexpected costs in case of an accident.

 Does Personal Auto Insurance Cover Rental Cars?

One way a “driver” is covered instead of a “car” under an auto insurance policy is when they rent the car.

As has been said, insurance companies cover rental cars. But they don’t do it all the time. If your personal auto policy includes collision and comprehensive coverage, it may apply. This means your insurance cover could pay for the damages if you crash a rental car.

However, some insurance policies limit coverage for rentals. If you use a rental car for work, your insurer may not cover it. In such cases, the rental agency’s insurance becomes essential.

Before renting, call your insurance provider. Ask if your auto insurance policy covers rental cars.

If you have already purchased our affordable full coverage auto insurance and become a valued policyholder of L.A. Insurance, you can directly call us at (800) 893-9393 to talk to one of our representatives. They can help you with whether your auto policy would cover rental cars.

Learn more: Will Insurance Pay for Rental Car During Repairs?

What Is Permissive Use and How Does It Affect Coverage?

Permissive use means you allow someone to drive your vehicle even if they’re not listed on your auto policy. Most of the time your car insurance will still cover the damage if an accident happens.

However, not all insurance companies offer full coverage for permissive-use drivers. Some policies may provide limited protection or require you to pay a higher deductible. If you frequently lend your car, you should check your auto insurance coverage to understand the terms and conditions of your policy. 

Does Permissive Use Apply to Family Members or Friends 

Yes, but with conditions. If a family member or friend borrows your car occasionally, your auto policy usually applies. This includes liability coverage for property damage and injuries.

Keep in mind that if one of your family members such as a spouse, partner, roommate, parent, child, siblings, friend, or other family member drives your car regularly, they should be listed on your car insurance policy. Some insurance providers require frequent drivers to be named to avoid denied claims.

If an unlisted family member or friend causes an accident, your auto carrier may still pay for the damages. But the downside is that you’ll most likely face higher insurance rates after a claim.

What Happens If Someone Drives Your Car Without Permission?

If someone else drives your car without permission and crashes, your auto insurance probably won’t pay for the damages whether it’s property damage or bodily injury. Driving without the car owner's consent is called non-permissive use.

If you do something like that and are unfortunately involved in an accident, your own insurance might cover the damage. However, the insurance company would investigate to find out if the claim filed is valid.

But if the unauthorized driver is uninsured as well, then you may need to pay for the damages yourself. That’s why, we suggest never allowing an untrusted person to borrow your vehicle.

If you still have any doubts, check your insurance resources. You can either contact your auto insurance agent or call the insurance company directly to know how they handle non-permissive use situations.

What Happens If Someone Borrows Your Car and Gets into an Accident?

If someone borrows your car and has an accident, your auto insurance usually pays first. As has been said, insurance mostly follows the car. So, your insurance company will likely cover the damage up to your policy limits.

However, coverage depends on different factors:

• Whether the driver had permission to drive your vehicle
• If the driver is listed on your car insurance policy
• Your liability coverage, collision and comprehensive coverage, and deductible
• State laws and insurance company rules

Who Is Responsible for the Damage? 

Responsibility depends on who caused the accident and what coverage applies. If your insured vehicle was involved in a crash, your insurance company will usually handle the claim.

Here’s how responsibility works in different situations: 

• If the driver was at fault: Your liability coverage pays for the other driver’s property damage and injuries. If you have collision coverage, it will help cover the damage to your own vehicle.
• If the other driver was at fault: Their insurance company should pay for the damages. If they’re uninsured, your uninsured motorist coverage (if included) may apply.
• If the driver took your car without permission: Their insurance policy should be responsible, but some insurance companies may still require you to file a claim. 

It’s also worth noting that if the person driving is excluded from your auto policy, your insurance company might deny the claim entirely.

Will Your Insurance Rates Increase?

Yes, an accident can result in higher insurance rates, even if you weren’t driving.   Your insurance company considers any claim under your auto insurance coverage when adjusting your premiums.

Your rates may increase if:

• The borrowed vehicle was involved in an at-fault accident
• Your collision coverage or liability coverage was used to pay for the damages
• The claim amount is high, especially for property damage or injuries
• You have a history of multiple claims

However, some insurance companies offer accident forgiveness, which might prevent a rate increase. If you frequently lend your car, talk to your carrier to directly ask them whether your auto insurance rate will go up after filing a claim.

Should You Add Frequent Drivers to Your Auto Insurance Policy?

Yes, absolutely. You should add frequent drivers to your auto insurance policy. If someone drives your vehicle consistently, your carrier may need them to be listed in your auto policy. If you fail to do so and if an unauthorized driver ends up crashing your vehicle, insurance adjusters might not approve your claim request.

For example, if an unlisted family member or friend crashes your insured vehicle, your insurance company might refuse to cover the damage.

On the other hand, adding a driver prevents complications when filing a claim.

So, consider adding frequent drivers like:

• Family members who use your insured vehicle often
• Roommates or partners who regularly drive your vehicle
• Employees who use your car for work-related tasks

Although adding them may raise your insurance rates, it guarantees coverage.  

What If an Uninsured Driver Borrows Your Car?

If someone who does not have insurance borrows your car and gets into an accident, you might have to pay for the damage. Because you own the car, your car insurance will cover the accident, even though you did not cause it.

If the costs of damages are higher than your insurance policy limits, you may need to pay the extra amount yourself. When an accident causes injuries or serious property damage, the costs can be high.

To protect yourself:

• Never let an uninsured person borrow your vehicle
• Make sure your auto insurance coverage includes uninsured motorist protection
• Confirm if your insurance company allows non-listed drivers under permissive use

How Does Car Insurance Work for Car-Sharing Services?

If you rent your car through a car-sharing service, your automobile insurance policy may not apply. Most insurers exclude coverage for commercial use. Instead, you might need separate insurance provided by the car-sharing service.

Car-sharing platforms often offer:

• Liability coverage for damages caused to others
• Collision and comprehensive coverage for the rented vehicle
• Protection for property damage or theft during the rental period

Note that these coverages may have limits. So, read the policy details before sharing your insured vehicle. 

Does Your Insurance Cover the Business Use of Your Car?

Most personal auto insurance policies do not cover business use. If you use your insured vehicle for work, you need a commercial auto insurance policy.

Personal car insurance coverages usually exclude:

• Deliveries and rideshare services
• Transporting clients or goods for profit
• Frequent business-related travel

If you get into an accident while using your car for work, your insurance might not cover it.

Learn more in detail about business-use coverage. Read our article on does my personal auto insurance covers business use.

When Should You Consider Non-Owner Car Insurance Policy?

A non-owner car insurance policy can be useful if you frequently drive but don’t own the vehicle. This type of auto insurance provides liability coverage when you borrow a vehicle or rent a rental car. Although it doesn’t include collision and comprehensive coverage, it can help you financially if you’re responsible for an accident.

Here's when you should consider non-owner car insurance:

• You often borrow a vehicle from your friends or family members.
• You rent cars frequently and want extra protection.
• You need proof of insurance coverage to maintain an insurance policy.
• You use car-sharing services that don’t provide full liability coverage.
• You want to avoid gaps in insurance coverage

Things to Remember Before Letting Someone Drive Your Car

Before you lend your car, keep the following things in mind:

1. Review your insurance policy terms including any restrictions for permissive and non-permissive use
2. Confirm the driver has insurance
3. Make sure the driver has a valid driver’s license
4. Keep insurance and vehicle documents accessible
5. Understand the potential consequences, such as insurance rate hikes, in the event of an accident caused by the other driver. 

Does Auto Insurance Follow the Car or Driver: The Bottom Line

So, does automobile insurance follow the car or the driver? If you have read this far, you must already understand that the answer isn’t straightforward. For the most part, car insurance follows the car, not the driver. In the case of liability coverage, auto insurance usually follows the driver. However, comprehensive and collision coverage only follows the vehicle.

If someone borrows your vehicle and crashes, your auto insurance usually compensates for the damages. In case the damage goes above the policy limit, the driver’s insurance might cover the rest.

Before letting someone drive your vehicle, talk to your insurance agents. Check the terms and conditions to see whether your auto policy covers permissive use, rental cars, or business use. Also, make sure that the other driver has a valid license and minimum car insurance coverage.

If you or the driver you lend your car to doesn’t have adequate car insurance coverage, consider our affordable insurance agency. You can get a cheap car insurance quote and secure fast and hassle-free insurance coverage within the same day. 

Frequently Asked Questions (FAQs)

What Happens If You Drive Someone Else’s Car?

If you drive another person’s insured vehicle, their auto insurance coverage usually applies first. Your own insurance in this case might act as secondary coverage which means it could help if damages surpass the owner’s limit. However, you need to keep in mind that you’re not covered in all situations and if you borrow the vehicle frequently, the insurer may require you to be added to the car insurance policy. Otherwise, your insurance coverage might not apply.

Does a no-fault state like Michigan follow the car or driver? 

In Michigan, No-Fault insurance usually covers the driver but can also cover the vehicle based on the policy. Liability typically includes both the car and the driver. Besides, optional coverages like uninsured, underinsured, and collision can cover both as well. The main coverage depends on specific situations.

What if the accident causes more than your coverage limit?

If the amount of damages exceeds your policy limits, the driver’s insurance policy might come in handy. Otherwise, you may have to pay for the damages yourself. Besides, if the other driver is at fault, their insurance company should cover the costs. Having higher liability coverage can prevent these potential financial risks.

Does insurance always follow the car?

Not really, but in most cases, it’s true that auto insurance covers the car. However, like always, exceptions do exist. For example, rental cars or car-sharing services may not be covered by your auto insurance policy. Besides, some insurance companies offer policies where insurance follows the driver instead.

When can someone else drive my car?

As long as they have permission, most insurance companies provide permissive use coverage. Nevertheless, if they drive frequently, they should be listed on your car insurance policy. If the driver is excluded from the policy, your insurance won’t cover them. So, check with your auto insurer before letting someone drive your vehicle.

Can my son drive my car if he is not on my insurance?

If he has a valid license and drives the car occasionally with consent, there shouldn’t be a problem. Most insurers allow permissive use. However, this varies by state regulations. If he lives with you and drives your car frequently, he may need to be added to your insurance policy.