Does Insurance Cover the Car or the Driver?

A typical question regarding car insurance is whether it follows the car or the driver. In most cases, your insurance policy is specific to your vehicle, and you will need insurance for each car you drive.

If someone borrows your car, your insurance will cover them as long as you gave them permission to drive the car. If you drive someone else’s car, their insurance policy should cover you.

There are some exceptions, like when you travel and rent a car. Many private insurance policies cover car rentals, but call your insurer before you rent a car to find out if it’s something available to you and, if so, what the coverage limits are.

• Does Insurance Apply to the Car or the Driver?
• If a Borrowed Car Gets Into an Accident
• Tips When Sharing Cars With Other Drivers
• Frequently Asked Questions

In most cases, your auto insurance policy follows your car. Despite being one of the more common myths surrounding car insurance, your insurance covers your vehicle whether you are driving or you let someone else drive. However, you must have given that driver permission to drive your car.

Someone can drive your vehicle with your insurance because, in most cases, your coverage follows your car. Cases when someone else is covered by your insurance when driving your vehicle include:

• The person driving your car is someone you’ve added to your policy
• You've given the person permission to drive your car

Although generally insurance follows the car, there are exceptions, like when you rent a car while you’re traveling.

The rental company will offer car insurance coverage, but your personal auto insurance policy may offer adequate coverage. Be sure to contact the insurer to find out if your coverage extends to a rental as some policies don’t include this option. If it does, you may not need to purchase rental car insurance. You can evaluate the difference in cost and coverage to make an informed decision.

If your policy includes comprehensive and collision coverage, they may cover you while driving a rental. However, if you only have liability insurance, you may want to consider purchasing additional coverage so that you don’t face enormous costs for the rental if it is damaged.

Auto insurance typically follows the driver. But even if you’ve given someone express permission to drive your car, their coverage will still depend on the factors below:

Unless you live in a no-fault state, the driver who caused the accident is responsible for covering the cost of damages, including vehicle repairs or medical costs.

If your car's driver caused the accident, you must file a claim with your insurance provider. The process is mostly the same as if you were behind the wheel. The difference is if the cost of damages exceeds your coverage limits. In this case, the driver's policy may serve as secondary insurance and cover the rest of the expenses.

Let's say your car insurance policy only has state minimum coverage limits of 25/50/25. While driving your car, your relative was in a collision, causing damages of $30,000. Your policy will cover $25,000, maxing out your limit.

In that case, $5,000 in damages remains uncovered. That's where secondary insurance comes in. If the person driving your car has an insurance policy, it may cover the remaining amount.

Although the coverage limits may be lower if another person is driving your car, the following coverages will take effect as long as your policy allows permissive use:

• Auto liability coverage pays for the other driver's medical bills (and that of their passengers) if someone driving your car is at fault in an accident. It may also cover property damage.
• Collision coverage covers the cost of repairs from damages to your car. You can use it even if someone else was driving and caused an accident.
• Medical payments coverage helps with any treatment the person driving may require after the accident.

Allowing someone to borrow your car occasionally with permission is ok as long as your policy permits it, but getting a joint car insurance policy might be a better idea if that person borrows your car regularly. You can also include the person's name on your auto insurance plan if they live with you. However, this approach may not work if you rent your car on platforms like Turo or Hyrecar. Check with the rental networks to find out what protection they can offer.

We answered several commonly asked questions about car insurance to help you understand situations when someone else drives your car.