Does Auto Liability Insurance Follow the Car or the Driver?

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Auto liability coverage is a type of car insurance that pays for damage you cause to other people in accidents that are your fault. If you let someone else drive your car or you borrow a vehicle, it can complicate insurance claims. In general, auto insurance follows vehicles instead of drivers, but the specifics of claims can vary since insurance laws and coverage terms differ from one state and insurance plan to another.

Auto Insurance Basics

When you buy a car, you typically have to purchase auto liability insurance for the car at the same time so that you can legally drive it off the lot. You also have the option of buying collision coverage and comprehensive coverage to pay for damage your car suffers in accidents and non-driving events like fires and storms. The liability coverage you buy typically acts as the primary insurance for any accident the vehicle causes, whether you are driving it or not.

Secondary Coverage

If you have auto insurance and you get into an accident while driving someone else's car, your own plan may act as secondary coverage. For instance, if your friend has an insurance plan with a $25,000 limit on liability coverage and you get in a crash that causes $35,000 of damage to the other driver, your friend's plan would cover the first $25,000, and your own plan would cover the remaining $10,000. In other words, liability insurance follows your car, but it may also follow you as a driver to act as a backup coverage when you drive other cars, depending on the terms of your plan.

Permission to Drive

The insurance you have on your car applies to other drivers if you give them permission to use your car. If someone uses your car without permission, you are not liable for any damage the vehicle causes while it is being used. According to Esurance, if someone like a friend or family member uses your car, it is generally assumed that they have permission unless you tell the insurance company that you want to deny them permission to drive your car.

Regular Drivers

Although an insurance plan typically extends to other drivers who use your car infrequently, rules are different for people who use your car regularly. When someone uses your car on regular basis, you usually have to name that person as a driver on your insurance policy to make sure that they are covered. Anyone who lives in your home may be considered a regular driver that needs to be listed on your plan.