Does Insurance Apply to My Car or the Driver?

Car insurance “follows the vehicle.” What this means is, your auto insurance policy will cover whoever drives your vehicle, as long as the driver has your permission, and is not excluded from the policy’s “covered drivers” list. Unless a driver is specifically excluded from a policy, the driver will be covered and the policy should pay for property damages and personal injuries. In other words, your auto insurance policy applies primarily to your vehicle, but will cover any driver provided the driver is not excludable under the terms of the policy.

Your insurance policy will cover all drivers who are not expressly excluded from coverage. In general, as long as the driver is not excluded and has your consent to drive the vehicle, the policy will apply to the driver. Different insurance companies have different restrictions when it comes to covered drivers -- one company may exclude a particular group from coverage whereas another may include them. Depending on the insurer and kind of policy purchased, inexperienced drivers up to age 24 may be excluded from coverage, unless the driver is a member of your household and drives the car routinely. If a driver is not a member of the household, insurance will only apply as long as the driver operates the vehicle with your permission; drivers who belong to your household are automatically covered and do not need your permission each time they drive the car. For example, if your 17-year-old daughter drives your car without your permission, she will be covered. However, if she lets her friend drive the vehicle without your permission, insurance will not apply to the friend.

In case of an accident that involves your car and a guest driver (who is not specifically excluded in the policy and has your permission), your auto insurance policy will be the primary insurance and will kick in first. Provided that you have adequate insurance, the insurer will pay for all damages to the vehicle and medical bills for personal injuries suffered by the guest driver. In this situation, only one policy applies to both the vehicle and the driver -- yours. If the extent of damages and injuries exceed your insurance limit, the guest driver’s insurance will kick in as the secondary insurance.

To have your auto insurance policy apply to a guest driver, the vehicle should only be driven with your permission. Before letting a guest driver borrow your vehicle, you should ensure that you have adequate protection for collision and have comprehensive coverage. You may talk to the guest driver to determine whether he has insurance, and whether that policy will cover your vehicle, in case your insurance is not adequate. You should also check your state’s governing laws regarding coverage for nonowner drivers. Different states have different laws when it comes to coverage for guest drivers.

As a car owner you are required to have your vehicle insured. Drivers in most states must have liability insurance as the bare minimum, while other forms of coverage, such as personal injury and protection for underinsured drivers, may also be required in some states. An important consideration in auto insurance is the presence or lack of “insurable interest.” Generally, a customer may not purchase a policy on a vehicle that belongs to someone else because the customer does not have insurable interest. However, you can purchase a policy for a car that is not registered in your name, such as a car that belongs to your mother or teenage son, if you can demonstrate insurable interest on the vehicle. Auto insurance policies for a vehicle that is not registered in your name will apply to the vehicle and the driver.