The question of who is covered under a standard car insurance policy is one with a variety of answers. A quick perusal of various Internet sites tackling the question all seem to be in agreement that anyone who uses your vehicle with your permission is covered, as long as they are licensed. While this is true as a general rule, it is not always the case and should never be assumed as such.
Let us help make your search for car insurance quotes as painless as possible–enter your ZIP code above to get started.
At the root of the issue is the fact that there are two subcategories of car insurance. The first is focused on passengers, other drivers, and property damage, and is considered liability insurance. The second subcategory deals with your car, being primarily collision and comprehensive insurance. How both of these subcategories are affected by someone else driving your vehicle is not necessarily cut and dried.
Are my relatives covered by my car insurance?
In most cases, state law recognizes relatives with permission to drive your car as being covered under your insurance policy. However, insurance companies have the legal right to require any relatives living in the same household to be listed on the policy in order for them to be covered. Furthermore, insurance companies also have the right to exclude some family members from coverage–especially those visiting from out of town for long periods of time. All of this should be outlined in your policy documents.
The reason things can be fuzzy when it comes to relatives is the fact that state laws are ambiguous when it comes to exclusions. Arizona is just one example of a state that allows exclusions but does not clearly define them, as you can read on the Arizona Department of Insurance’s FAQ page. Also keep in mind that bodily injury coverage only applies to passengers and drivers of other cars who might be injured. If your relative is injured, their insurance will have to cover the cost of those injuries.
Does someone who borrows my car need his own insurance?
According to the letter of the law any individual driver does not need his own insurance in order to borrow someone else’s vehicle. But, as previously stated, if that individual is injured in an accident, his health insurance will have to cover his injuries because your liability policy won’t. If the individual has no health insurance, he will be required to pay out-of-pocket. If he does not have the financial resource to do so, it could end up in a lawsuit against the owner of the vehicle.
If an individual borrowing your car does have his own auto policy, the chances of everything being covered increases–but so do the complications. As a general rule, your insurance company will probably insist that the other driver’s insurance pay all damages resulting from an accident when your car is borrowed. In all likelihood, both insurance companies will haggle back and forth until some sort of agreement is reached. If insurance companies cannot work out a deal themselves, it could end up in court.
I’ve heard about “reasonable belief”: What is this?
In a series of private passenger auto insurance FAQs, Georgia State University brings up an interesting point that is not clearly defined by law. It states that someone borrowing your car would be covered under insurance–even if you did not explicitly give that person permission–as long as there is a reasonable belief that you would have given them permission had they asked. Similar statements are found on various DMV websites from the different states.
That being said, the ambiguity of “reasonable belief” gives insurance companies quite a bit of leeway in determining whether or not to provide coverage. As an example, we can use out-of-town guests who are staying with you for extending amount of time. We’ll assume they have access to your vehicle on a regular basis without specifically asking permission every time.
You could argue “reasonable belief” and insist that you gave your general consent for your guests to use your vehicle throughout their stay. If their stay was extended beyond what your state considers reasonable before state residency requirements kick in (usually 60 to 90 days), your insurance company could counter that, since your guests were not listed on your policy, they are excluded. Furthermore, if your guests use your vehicle to do something of which you would not normally approve, that automatically raises questions of reasonable belief.
At the end of the day, the question of who is covered under your car insurance is not easily defined. Under normal circumstances, you should be fine allowing friends and family to borrow your car on a limited basis. But to save yourself a lot of unnecessary trouble you should try to avoid doing so on a long-term basis, or with regularity. Even in cases where an individual borrowing your car is covered, any accidents they have will come back to you in terms of higher rates in the future.
Enter your ZIP code below and in just a short time you’ll have a number of online car insurance quotes to compare.
