If you’ve ever lent out your car, you understand the fear that comes with being generous. Car repairs are expensive. So when you put your car key in someone else’s hands, you want to make sure your insurance has your back.
You need to start with your insurance agent. Ask him or her, “Does my car insurance cover other drivers?”
The answer may surprise you. Keep reading to learn all you need to know about why your insurance may or may not cover other drivers.
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Who Can Drive the Car and Be Insured?
When you buy a car, you need to go car insurance policy shopping. As you shop, ask lots of questions, including, does my car insurance cover other drivers? Then take a few steps to make sure your insurance covers who you want it to and that it excludes those that you don’t want on the policy.
List Your Drivers
List all of the drivers in your household; know if your insurance covers drivers that aren’t listed; you can always take a risk in lending out your car, but you run the risk that your car will not be covered; nor will the driver;
The best auto insurance will cover you regardless of who is driving the car.
if you have a teen driver, you should check your policy. Some policies exclude teen drivers or drivers with permits. You may need to list them exclusively.
Beware, your car insurance will go up. Even the best car insurance understand the liability of putting an inexperienced driver behind the wheel of a car.
Ask About Discounts
If you want to add a teen driver to your list of drivers but worry about the cost, ask about discounts.
Some companies will offer up to a 15 percent discount when you add a teenager to your policy if you fulfill specific requirements.s If you’re teaching your teen to drive, some insurance companies will offer programs so you can learn how to teach your teen.
Programs like this offer parents and teens webisodes that teach teens to drive safely along with an agreement that both a parent and teen can sign. This agreement basically states the teen will drive safely.
Grades matter as well. Some insurance companies believe good grades reflect responsible teenagers. So even something as low as a B average on a report card could earn discounts for teen drivers. Nationwide
Some insurance companies will offer actual online courses for parents and teens to take together. Parents and teens who take the class together can earn discounts on insurance.
Your car insurance will gladly cover your teen driver when you list them, and they could even offer you discounts for having a safe teen driver. When you prove that you’re a safe risk, companies reward you.
A good insurance company will help you local multiple discounts on different policies.
You can exclude a driver as well. If you have someone that you prefer not to drive your car, then you can list that person and documents that exclude them from coverage.
For example, once your teen leaves the house, you may want to list them as an excluded driver. This way your insurance rates go down, and you have an affordable payment once again.
Beware, when you sign the documents that exclude a particular driver, that driver cannot legally drive your vehicle again. Allowing an excluded person to drive your vehicle will carry the same penalty as if the driver was driving an uninsured car. You put yourself at great risk allowing the excluded party to drive your vehicle.
Make sure that the individual you exclude from your policy will never drive your vehicle if you write them off the policy. If an excluded person drives your car and crashes, you alone will be responsible for all of the damage.
Citations From Another Driver
If you lend your car out to another driver, even one listed on your insurance, the driver can cause your insurance to go up. If the driver of your car receives a speeding ticket or any kind of citation, your car insurance can go up.
Lending your car out to an irresponsible driver reflects poorly on you. That driver puts your vehicle at risk, and this makes insurance companies wary. It makes you more of a risk.
So make sure when you lend out your car, the driver is responsible.
The Criteria for Approved Drivers
Some insurance companies automatically cover the driver of your vehicle. Many people believe the myth that insurance follows a driver.
This simply isn’t true, at least on a typical policy. Most often the insurance follows the car, not the driver. But the driver does need to fit specific criteria.
- The driver must have your permission to drive your vehicle. So if you have a friend, a family member, a co-worker, a neighbor, or just about anyone the permission to drive your vehicle, your insurance may automatically cover them. They just need your permission.
- The driver does not have to be a member of your own household. You have already listed those household members, so they’re automatically covered because you listed them. This driver is not listed.
- The driver needs to have his own car insurance and be in good standing with his insurance company.
So, does your car insurance cover other drivers? Yes, it may. They just need to be in good standing with an insurance company and have your permission to drive your vehicle.
You can guarantee your drivers are covered if you list the drivers who will drive your vehicle on the insurance policy.
Why Does Your Driver Need Insurance?
If insurance coverage follows the car and not the driver, why does that driver need insurance?
Let’s say that you lend your car to a neighbor. You have given the neighbor permission, and the neighbor is obviously not a part of your household and thus not listed on your policy.
If the neighbor has an accident that causes an accident that causes $10,000 in property damage and your policy maxes out at $5,000, who will pay for the other $5,000?
Logically, your neighbor should because he caused the accident. If the neighbor has quality car insurance, then his insurance may kick in and pay the rest of the bill. Everyone walks away happy.
Car insurance does follow the driver with one instance: when you’re driving for business. Often your personal car insurance will cover you when you’re driving the company vehicle.
Type of Insurance Matters
The specific type of auto insurance you have will also determine if the insurance covers any driver or just the drivers you’ve listed on your policy. Three different basic types of insurance exist.
1. Named Insurance Policy
A named policy is a policy where you specifically name the drivers of your vehicle. This means that a policy must have a person’s name on it specifically for the policy to cover that driver. Anyone who drives your car that is not named on the policy will not be covered by the policy.
2. Liability Car Insurance
Liability insurance will pay for the damages done to any other vehicle or property and any medical expenses caused by the driver. Liability insurance basically protects the driver from having to pay on his own for damages and injuries he causes.
Liability insurance will not pay for damages to your car or injuries that you or the driver of your car receive.
3. Full Coverage Car Insurance Policy
Full coverage car insurance is also known as comprehensive and collision insurance. Comprehensive insurance offers the most coverage of all policies. It also costs the most money.
If you have full coverage car insurance, you’re covered. When anyone with your permission to drive your car has an accident, the insurance will pay for the damages the driver causes both to your car and to other property if the driver is at fault. So full coverage covers all the damage.
Most full coverage policies require you to list the potential drivers of the car, especially if those drivers live with you or are related to you. This makes sense since full-coverage poses the greatest risk to an insurance company.
If you do not fully own your car, you will have to have full coverage car insurance. If you owe any amount of money on it and have a regular car payment, your lender will require you to have full coverage.
What About a Rental?
When you’re out of town and need a rental car, you may wonder, does car insurance cover other drivers? In the case of a rental car, you will need your own insurance because it will follow you. Your insurance will cover you, the driver of the rental car.
Most rental companies require proof of insurance so they know your insurance will cover any damages you may cause.
Ask About Coverage
Now you can fully answer the question, “Does my car insurance cover other drivers?” Take the time to ask your insurance agent about your policy. Read it over and learn who is and is not covered.
For all of your insurance needs, contact us.
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