How does insurance work if you share a car?

If you share a car, insurance can be a bit more complicated than when you're the sole owner and driver of the vehicle. You will need to decide who will be listed as the primary driver on the policy and then add other drivers as additional drivers.

The people you share the car with will usually still be covered while driving the vehicle even if they are not added as additional drivers, but your insurer is more likely to cover any claims if they are listed. You will also need to decide how the premium will be paid and how claims will be handled.

It’s generally not worth it to have two separate insurance policies on the same vehicle. Having just one insurance policy will be cheaper, and you can add the rest of the people sharing the car as additional drivers.

Key Things to Know About Insurance When You Share a Car

• You will need to choose a primary driver. If you share a car with someone, you'll need to decide who will be the primary driver – the person listed as the main driver on the insurance policy. If only one of you is listed on the vehicle’s registration, that person will be the primary driver. If both of you are listed on the registration, then either of you can be the primary driver. Your insurance company will check the driving record of every driver on the policy, but the primary driver’s risk factors are weighed more heavily.

• You can add additional drivers. If there are other drivers who will be using the car regularly, they will need to be added to the insurance policy as additional drivers. This is important because it will help ensure they are covered in case of an accident. Some insurers allow you to add a driver to your policy if they either live with you or borrow your car regularly, while other insurers do not allow a driver who does not share your permanent address to be added to your policy.

• You will need to agree on coverage limits. You and the other driver(s) will need to decide on the appropriate coverage limits for your insurance policy. You can check out WalletHub’s guide on how much car insurance you need in each state to get started.

• You will need to determine who will pay for the insurance. You'll need to decide who will be responsible for paying for the insurance. This could be split evenly between all parties, or one person could take on the responsibility.

• Claims will be more complicated. If you own the vehicle outright — meaning you are not leasing or financing it — the claims check will be paid to the primary driver. If you’re sharing the vehicle, it can be tricky when it comes to dividing the claims payout. For instance, if an additional driver gets into an accident, the insurance settlement may still be given to the primary driver. You should discuss with your insurer and the other drivers you share the vehicle with how claims will be handled in the event of an incident.

To learn more, check out WalletHub’s guide to how car insurance works.