Does car insurance follow the car or the driver?

Car insurance follows the car, not the driver, in most cases. There are a few situations where car insurance follows the driver, though, such as when the car’s insurance limits are exceeded, in which case the driver’s coverage can be used to fill in the gaps. There’s also some disparity from company to company – your policy might provide less coverage for other drivers, or even no coverage at all.

It’s advisable to review your insurance policy before letting someone else drive your car. It also helps to ask if the other driver has insurance before they get behind the wheel in your vehicle. And don’t forget to confirm coverage before you drive someone else’s car, too.

The driver’s insurance usually plays a (small) role

In most situations, the driver’s insurance plays a role regardless of whose car they are driving and who caused the accident. That is true regardless of whether a state has at-fault or no-fault laws because no-fault insurance only applies to medical payments. So fault still matters for property damage, at least, and the at-fault party needs to pay up.

However, the driver’s insurance can end up being negligible. If you are insured and you cause an accident in a friend's car, the primary coverage is their insurance, not yours. Instead, your car insurance is the secondary source of coverage. If your friend's coverage is exceeded by the collision, your insurance picks up the slack.

Uninsured drivers depend solely on the car's coverage

If you don’t have insurance and you drive your friend's car, your friend is on the hook for whatever damage you cause. But if the damage exceeds your friend’s insurance coverage, the other driver(s) could sue you and your friend, who also could sue you to cover his or her share!

This is assuming your friend gives you permission to drive. If you don't have permission to drive someone's car, insurance gets a little more complicated.

Permission matters - but it's hard to prove

If a friend with no insurance takes your car without permission and crashes it, you're liable for the damage they cause. That’s because it’s very difficult to prove you didn't give your friend permission to use your car. And in situations where you let your uninsured friend use your car, your insurance needs to cover any damage they cause.

However, the responsibility can fall on the friend who takes your car if they have their own car insurance. If they cause damage in that situation, their insurance policy would be the primary coverage, while yours would be secondary – again, as long as you can prove that you did not give them permission to use your car. In that case, your insurance would only need to kick in to cover gaps in their insurance policy, or if their insurance maxed out before the damage was covered fully.

If it’s not a friend who takes your car, things are different. Should someone steal your car, you're generally not liable for the damage they cause to others' property. But you need your own insurance for repairs to your vehicle if they vandalize it.

Best practices

• Check your policy to see who and what is covered.
• Keep a copy of your car insurance information in your car, in case you're not there when an accident occurs.
• Make sure your friends have a valid driver's license and car insurance before you let them drive your vehicle.
• Add people you live with to your car insurance, as well as other people who use your car regularly.
• If you don’t own a car, you can get non-owner car insurance to make sure you’re covered when you drive someone else’s vehicle.

Liability car insurance usually follows the car and not the driver. When someone borrows your car, they are also borrowing the insurance coverage. So if they cause an accident, you will likely be responsible for paying the deductible and see your rate go up. If the person who borrowed your car has their own insurance, their policy may serve as secondary coverage in the event damages exceed your policy limits. In a sense, this means liability coverage follows both the car and the driver. But secondary insurance will only step in after the primary insurance has been tapped out.

Collision and comprehensive coverage only follow the car. If you carry these coverage types, your policy will pay for your car to be fixed after an accident no matter who was driving. But only your policy is relevant. Even if a driver who borrows your car has their own collision and comprehensive coverage, their policy won’t apply as secondary coverage.

Insurance tends to follow the car because most policies allow “permissive use” claims. This lets other drivers borrow your car and be covered in the event of an accident, assuming you give them permission. But permissive use has limitations. Your insurer probably won’t hold you responsible for damage caused by a thief who wrecked your car on a joy ride, for example, but you’ll have a hard time proving your teenager didn’t have permission to take the car. Not all policies allow permissive use claims, either. Some only cover drivers explicitly listed by name. But as a general rule, car insurance follows the car no matter who the driver is.