How does car insurance for additional drivers work?
Have you ever borrowed your car or driven a friend’s or relative’s car? At such times, it is important to know if your car insurance will cover damages in the event of an accident, even if you are not driving.
It is essential to understand what your insurance covers, who it covers and how an accident can affect what you pay. Here we explain the most important things about car insurance for additional drivers.
Before loaning your car, consider who will be driving it:
If a friend or family member asks to borrow your car, make sure he or she is fit to drive, i.e., has a license, has not been drinking alcohol or has no problems with his or her driving record.
Your car insurance covers other drivers IF...
- If the person lives with you and is on your policy: Yes, he/she is covered.
- If the person does not live with you and is not on your policy: Yes, most of the time they are covered. For example, if a visiting friend or relative takes your car and has an accident, your insurance will most likely cover the incident because they do not live in your home.
- If the person lives with you, does not have his or her own insurance and is not on your policy: He or she is not covered, and you could get in trouble with the insurance company for not having reported the driver.
This may vary depending on the state where you live, but generally, your insurance will cover the damage, even if someone else is driving your car, as long as they do not live with you, are licensed and can legally drive.
Keep in mind: If your insurance covers damage caused by the person to whom you lent the car, the cost of your policy is likely to go up in the future.
What if the person driving your car has an accident and is not at fault?
The other driver’s insurance will pay for damages and injuries. In this case, do not call your insurance company, but the insurance company of the person responsible for the collision.
Possible consequences if the person is not on your insurance:
- The company may cover the collision, but will include the person on your policy, which will increase the cost of your insurance.
- They might cover the accident, but cancel your policy afterwards, forcing you to look for a new company, with higher prices.
- In the worst case, they may refuse to cover the damage and you will have to pay for it out of your own pocket.
It is always advisable to be familiar with the terms of your policy, as some policies have exclusions or limits on coverage if someone else drives your car and has an accident.
