Before I started working in the car insurance industry, I always wondered if the car was insured or the driver. Of course, I had insurance on my car, but does that car insurance follow me as the policyholder or does it only apply to that particular car?
It’s good to be prepared with this info BEFORE something happens!
Insurance that follows the driver will usually be limited to some form of liability coverage. Many factors can influence how your policy pays out for insured automobile damages, so it’s good to understand things like insurance deductibles and policy limitations.
Take this example into consideration: What if a friend borrows your car to run to the store? Down the street, he accidentally runs a stoplight and hits another car. Or what if YOU’RE the friend who borrowed a car to run an errand and you were involved in an accident. Does your own coverage transfer since you were driving?
The answer to these questions can be different from state to state, so I’ll speak only for Utah for these scenarios.
In the state of Utah, the physical damage coverage for the car that you’re driving (Comprehensive and Collision) will follow only that vehicle. So as good as your friend’s intentions may be, his coverage will not pay to fix your car if you lend it out to him and there was a wreck. In this scenario, you would first need to make sure that you have Comprehensive and Collision on this particular car.
Additionally, the liability coverage (which pays out to other people) usually only extends from the vehicle being driven. For this reason, you could actually be ticketed for driving your friend’s car if he did not have insurance on it, even if you carry the greatest policy on earth for yourself.
In general, when you borrow a car, you borrow car insurance, too. Insurance follows the car, not the driver. That means if you are involved in an accident while driving someone else’s car ( that is not on your insurance policy), the owner of the car will probably be held responsible for any financial damages. Your insurance does not come into play.
If we borrow another person’s car, it’s not common for us to say “Hey bro, you have insurance don’t you?” (especially if we say it in a hippie-surfer voice), but it’s not a bad idea to ask if we want to avoid a pricey Driving Without Insurance ticket.
Another example occurs with rental cars: Do I buy their pricey liability and physical damage waiver? This one isn’t so easy to answer because it depends on the language in your particular auto policy, but many insurance companies will extend coverage from your own policy to the rented vehicle.
There are a few things commonly not covered in this scenario (such as the daily rental fee while the rental car is being repaired), so speak with your agent to find out how your policy responds to rented vehicles. Saving the money on the rental company’s fee is worth the call.
At Keystone Insurance, we can help you understand your coverage and guide you through different situations specific to your driving needs. Many factors can influence how your policy pays out for damages, so it’s good to understand things like deductibles and policy limitations.
Give us a call, or fill out our form below if you’d like us to go to work finding you the perfect car insurance fit at an amazing price…(We’ll totally hook you up, bro!)
Learn more by checking out the Department of Motor Vehicles and the Vehicle Insurance page on Wikipedia.
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