UNDERSTANDING WHETHER CAR INSURANCE COVERS OTHER DRIVERS OR NOT
There could be a situation when your friend who has loaned your car meets an accident and causes potential damage to someone else’s property. In such situations you would be facing questions like does my car insurance cover other drivers or who will pay for the damages caused by my friend’s fault. To understand this better, you would first need to understand who is covered under the car insurance, you or your car.
Who gets covered by car insurance?
As a rule of the thumb, the insured person and anyone living in the same household as the driver would be covered under the insurance. This means that if the driver’s family members (who stay in the same house) cause an accident, the insurance company will cover the damages and pay the other party for the medical expenses and other expenses related to the accident.
However, it would be done only when all the members of the household would be included by the car owner at the time of buying the insurance. If any member’s name was mentioned in the Excluded Drivers list, and he or she commits the accident, the insurance company would not take liability for that person or for the damage caused by him or her.
Situations that could arise
If you loan your car to someone who does not live in the same house as yours, you can do that under ‘Permissive Use’ clause and in that case, if that person commits an accident, your insurance company will cover that. Usually it goes something like this.
• If a non resident member drives the car and is insured himself, his insurance will cover the damages first. If his insurance limit is busted, your insurance company would come in the picture and pay the differential amounts to the other party.
• If the non-resident member drives the car with your permission and is not insured himself, your car insurance will cover him, provided you have liability coverage attached to your policy.
• If the non-resident member drives the car without your permission, and if you can prove it, you will not be held liable for any damage and your insurance will not be required to cover the damages. However, proving that the car was taken without your permission could become little difficult at times. If the car was taken by someone without your permissions and is neither your friend nor your family member, you can report a theft and it would be that person’s responsibility to pay for the damages caused by him.
However, if the person was in an intoxicated sate or without an active driver’s license, your insurance will simply shrug the case off and will not pay a single cent on account of covering for the damages caused by this person. In addition, you would be held accountable for allowing someone who should have been allowed to drive a car. It is thus wise that before you let anyone else drive your car, check properly if the person is insured or not and whether he is in the right physical state to drive the car. That will ensure that you do not fall in a position where you will have to check that does my car insurance cover other drivers or not.
I thought You could be interested in this article: Does Car Insurance Go Down At 25 Or It Is A Myth? and What To Do With A Totaled Car And No Insurance To Cover It Up
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