At long last, your mom/friend/uncle is coming to visit you! You cannot wait to see them, but they cannot wait to see the museum/concert/sporting event they've actually come to your town to see. And of course, they want to drive your car to the venue, because wouldn't that just be easier than two Ubers or taxis, and faster than the bus?
Before you hand over those keys, take a minute to think about your car insurance. It’s a little confusing and circular, right? Are you insured, or is the car? What about someone else driving your car? Does your insurance cover a rental car, or do you need something else for that? What if you don’t have a car but sometimes drive one? Don’t stress out; we’re here to help you make sense of the wacky and wonderful world of car insurance.
What’s covering who(m)?
The short answer to whether your car insurance follows you or your car is: the car, but it depends! There are types of car insurance that do one, the other or both, and you need to know what your policy says to know what you have, so don’t be afraid to pick up the phone and ask your provider.
First, two quick terms to learn:
Permissive use: The concept that your insurance covers other drivers (who are not listed on your policy or members of your household) who use your car infrequently.
Named driver: To be covered, a driver must be on the policy.
So, you ask, who can drive my car and be covered? Most of the time, anyone with a license can legally drive your car and be covered by your car insurance. One common and perhaps unexpected exception, however, is members of your own household: People who live with you should typically be listed on your policy and covered and paid for that way, not as one-off drivers.
That works both ways – assuming your friends aren't driving around illegally without car insurance, you are covered by their policies when you drive their cars. Some policies, however, have limits on how regularly a not-your-car is available for your use. If you regularly use another person’s car – say, as a babysitter, a carpool driver or the like – your friend’s provider may require that you be added as though you’re a member of the household. As ever, just ask.
Also, if you don’t have a car, but you only occasionally drive friends’ cars or rental cars, you don’t need to go out and buy car insurance. Yeah, we are an insurance website telling you not to buy insurance, in this case.
What if something happens?
Worst case scenario, you are at fault in a collision while driving someone else’s car. (Or vice versa, but to keep it simple, we’ll use you as the driver in our example). As noted above, if you should have been considered a member of the policyholder’s household, their provider may not pay. If you are a one-off driver, their insurer will probably cover the damages. In some scenarios, you have to be found to be at fault, legally, for the damages before they do so – this may mean you’ll be fronting the money out of pocket and getting reimbursed. Your own insurer will probably only have to pay if you exceed the owner’s policy’s limit.
And if you get a speeding ticket while driving someone else’s car? Tickets follow the license-holder, not the car. That can make your rates go up, but the person whose car you’re in won’t suffer.
Almost always, your auto insurance will cover you for any car rental. If you are one of those folks without a car or car insurance, you’re also in luck: All rental cars are automatically insured at state minimums. You can opt to add coverage to that if you’re worried about covering costs above the minimums, but if you’ve got your own coverage, you probably don’t need to do that. Also: Check with your credit card companies, as many include some type of car rental protection as one of their perks of membership. You may be more covered than you think!
One exception: You may want to look into additional insurance for a rental if you’re planning to rent a luxury or specialty vehicle, but we recommend you purchase it from your provider or through a travel insurance provider rather than at the counter where they hand you the keys. You’re kind of out of options at that point, and some rental companies charge far above market rates for additional coverage.
And if you’re planning a road trip, don’t sweat anything on the car insurance front (sweat the entertaining-your-kids front instead). All car insurance policies are valid nationwide. The amount of coverage will shift up to meet state minimums higher than your own, if you only have the minimum coverage for your state--they won’t shift down, so you can’t lose coverage by driving across state lines.
Car insurance is here to protect you, your family, your friends, your stuff and strangers on the road. Be sure you know what you’ve got by calling your provider, and don’t forget that there are some key ways to save on your insurance. Once you’re insured and safely behind the wheel: Get on out there!