Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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UPDATED: Jul 14, 2021

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Car insurance coverage can be confusing at times. Many people wonder whom their car insurance covers when someone else is driving, and the answer is that it depends upon your particular car insurance policy. However, one of the best ways to know for sure is to put all regular drivers on your car insurance policy and never lend your vehicle to others.

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Many wonder if their car insurance covers their family members, members of their household or others who might occasionally drive their car. The easiest thing to do is to ensure that they are covered, so that you are not left with a big problem if they are not covered! Nothing can drive a wedge between family and friends like a big amount of liability for a car accident.

People Who Borrow Your Vehicle

Many drivers want to know if their car insurance will cover their car if they lend it to someone else on occasion. According to the National Association of Insurance Commissioners (NAIC), your liability coverage is generally still in effect if someone is driving your vehicle with your permission.

The NAIC also contends that you could have a car insurance policy that specifically states that no one else is covered when driving your car. Then, you are out of luck and partly responsible for damages caused by the driver of your vehicle.

Even if your car insurance does cover you and your vehicle when another driver is operating it, there is a host of liability issues for you, the owner, from a legal standpoint.

As a vehicle owner, it is your responsibility to essentially keep it from crashing into other cars. This extends even to loaning it out; you are still legally responsible. So if you do not have enough insurance to cover all damages, you and the driver who caused the crash in your vehicle can be sued to recoup others’ loses.

Obviously, things are different if the driver who caused the accident in your vehicle is specifically excluded from your policy. If an excluded driver is operating your vehicle with your permission, then your car insurance provider will more than likely not pay one red cent. You and the driver will be completely liable for paying for damages out-of-pocket.

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Family Coverage

In general, car insurance does cover someone just because they are your family member, but you need to make sure your car insurance does not include wording that restricts coverage if others are driving your car. Also, this extension of coverage to family members usually only covers a spouse or those related by blood. Family members by marriage, such as a stepbrother or stepsister, are not covered by this family extension.

While a family member who drives your car is likely still covered by your car insurance, you need to check your insurance policy or speak with an agent to understand exactly what happens in such a scenario. The last thing you want is for your family member to cause an accident with your vehicle and your insurance will not cover the damages.

Members of My Household

Again, just because someone lives in your household does not mean that they are automatically covered by your car insurance. If a member of your household is likely to be driving your car on occasion, the best thing to do is to add them to your insurance policy as a named driver. That way, you won’t wonder if you are covered; you will know for sure.

Car insurance rates are based on many factors, but the driving record of the insured is one of the most important factors. If someone regularly operates your vehicle without being on your insurance, car insurance companies want to know about it so they can consider that driver’s history as well.

Telling your insurance company who drives your vehicles is one of the necessary steps in the application process, according to the Insurance Information Institute.

If a member of your household drives your vehicle with great frequency, and you claim that no one else drives your car, then your insurance company may view that omission as fraud.

Penalties for fraud, even soft fraud like lying on an auto insurance application, can cause your car insurance company to:

  • Drop you as a customer
  • Refuse your claim
  • Bring charges against you that include fines and jail time

Collision Insurance

Liability coverage applies to damages caused by you or someone driving your vehicle to another driver and that driver’s vehicle. But what about your vehicle? Generally, collision coverage is an optional coverage that you have on your car insurance policy that pays for damages to your car regardless of fault.

According to the Texas Department of Insurance, collision coverage usually still covers your vehicle if someone else driving your vehicle with your permission crashes your vehicle. Again, you need to review your policy to understand all clauses that might restrict your coverage if another driver operates your vehicle.

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Other Options

You may not want to add your family member or household member to your policy for many reasons. They might have a bad driving record, they might be young, or they could have other factors like poor credit that will cause your insurance premium to rise.

While it may seem tempting not to add risky drivers to your policy in order to save money, the other alternative is to not let them drive your car at all.

You are putting yourself at great financial risk when you let someone else drive your vehicle who is not a named driver on your insurance policy. They may be the most cautious driver, but no one can predict the future.

Another option is for your family member or household member to purchase car insurance of their own. There are non-owner liability car insurance policies that cover drivers when they operate some else’s vehicle. In this way, your car is still covered without having to negotiate the fine print wording of your car insurance policy.

Injuries and damages in an accident caused by a driver with a non-owner liability policy will be paid for by their policy. You will also need to make sure that they have collision as part of their policy or that your policy’s collision coverage will still pay for damages to your vehicle.

Drivers without Permission

All car insurance coverage for other drivers assumes that you have given the driver permission to operate your vehicle. Essentially, you have been given the opportunity to assess the risks of the person’s driving history, and have take responsibility for those risks when you let someone else drive your vehicle.

However, if you have not given that person permission, then you have a limited amount of options. Generally, if you have not given someone permission to operate your car, then they have stolen it.

Your car insurance company will want you to file a claim and fill out a stolen vehicle report with the police and press charges if you want your car insurance to cover the damages.

There are no gray areas here in the eyes of the insurance company. Either someone had your permission or they stole the vehicle. While this is certainly a sticky situation to work out with family members and friends, you need to protect your liability for the accident as much as possible.

If you have family members or acquaintances who you feel might put you in this awkward position, make sure to lock your vehicle and keep your keys with you as much as possible. This is important when teen drivers are part of your household, as their reasoning skills are not always the best.

You also may want to exclude such drivers by name on your car insurance policy if it is an extreme case, such as might occur with drug abuse. Let that friend or family member know that you have excluded them from your policy, and that you will press charges if your vehicle is taken without your permission.

Pro Rata Charges

The big question in an accident when someone else was driving with your permission is who will have to pay for damages. If the driver of your vehicle has liability insurance, then it is likely that their insurance might cover some of the damages they caused.

The charges could be worked out pro rata, a term that means each party pays in proportion to their responsibility, according to the Legal Information Institute of Cornell University Law School. Essentially, it can be determined that you are responsible for part of the damages caused by your vehicle while the driver is responsible for the other part.

Overall, the safest course of action is to only allow drivers who are named on your car insurance policy to operate your vehicle. It is not worth the headache of navigating the ins and outs of your car insurance or damaging your relationship with family members or friends in the event they cause an accident or other damage to your vehicle.

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