A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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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, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 13, 2021

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Here's what you need to know...

  • Liability insurance will follow the driver and activate when driving a non-owned car
  • Physical damage coverage will only cover your listed vehicle or a temporary substitute
  • Drivers who live in the same household need to be listed on one another’s policies
  • Policies will provide coverage for permissive users if they’re not insured
  • Always review your coverage and speak with your agent before you borrow a car

There may come a time in your life when you’re asked to drive a friend’s car. Your automatic answer will more than likely be yes, but that’s not always the wisest choice when you haven’t thought about the consequences of your actions. Since you don’t own the car and you’re not a listed driver on the primary insurance policy, it’s only reasonable to be hesitant to operate the car. After all, getting into an accident when you’re uninsured can land you in court and even affect your reputation with the DMV. Start comparing car insurance rates now by using our FREE tool above!

Luckily, if you have coverage, there’s a good chance that the mandated coverage options will follow you while you’re driving your friend’s car. While the general idea of car insurance is simple to grasp, it’s the terms and the definitions that are written into the policy contract that can complicate things. Read this guide and learn how your insurance works when you’re driving a vehicle that isn’t registered to you.

Does insurance follow the driver or the car?

There’s a great debate regarding how insurance works–specifically as to whether it follows the driver or the car. If you really want to learn about the product you’re paying for, you can start by understanding that, no matter how much people insist there’s a right answer, neither answer is 100% true all of the time.

In some cases, insurance follows the driver and in others it’ll follow the car. It depends entirely on the type of coverage you’re talking about, who owns the car being driven, and the reason the driver is driving a car they don’t own. This is why it’s really important that you learn which scenarios you’ll be covered for and which present some major complications.

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Will your liability coverage protect your assets when you borrow a car?

One of your biggest concerns, when you’re looking for the provisions written into your insurance contract, may deal specifically with liability coverage. When you own a car, one of the only required coverage options in most states is liability coverage. This is why anyone who carried auto insurance will have some limit of both Bodily Injury and Property Damage Liability coverage.

While you’re not obligated by law to purchase liability coverage on a car that’s not registered in your name, it’s still your fiduciary responsibility to have coverage whenever you’re operating any car.

If you make the mistake of driving a car that’s not insured and you don’t have your own liability insurance, your decision to drive uninsured is putting others at risk and your assets at risk.

When is a vehicle deemed an eligible vehicle for coverage extension?

If you do have your own liability coverage, your liability coverage will follow you when driving a car you don’t own and that you don’t have regular access to. If you do have regular access, coverage extensions may be specifically excluded.

In order for your coverage to extend, you need to be driving the vehicle as a temporary replacement or substitute for your car. Just remember, insurance follows the driver for liability coverage, but the car being driven must be classified as an eligible vehicle. Eligible vehicles can include rental cars, the neighbor’s car, a friend’s car, or a relative’s car if you’re visiting from out of town.

Will physical damage coverage on your policy extend to a borrowed car?

If you’re driving a friend’s vehicle and you get into an accident, it’s only human to feel bad. Unfortunately, as far as physical damage coverage options like comprehensive and collision are concerned, in most cases the coverage follows the insured vehicle. Comprehensive covers vehicle damage caused by fire, theft, vandalism, falling objects and more. Collision covers damage that’s caused by a vehicle crash with another car or object.

When you carry full coverage on your policy, it means you’re carrying a cover for damage, but unlike liability, physical damage covers the car and not the listed driver.

There’s always an exception to the rule. When you’re renting a car rather than borrowing, your comprehensive and collision will cover the temporary substitute as if it were your covered auto. You will still have to pay your deductible if you file a damage claim. While this is true, you can’t just borrow friend’s car that doesn’t have full coverage and expect your company to pay for the damage the owner’s policy wouldn’t pay for.

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What if you are uninsured and borrow a vehicle?

If you’re licensed but you don’t own a car, it’s important that you understand how the owner’s insurance will cover you. Since the owner is the one who is responsible for insuring the car, coverage typically will activate if you drive the car and you don’t have your own policy. Liability will pay when you, as the borrower, cause bodily injuries and/or property damages to a third party while you’re in the borrowed car.

The coverage kicks in only if you fit the classification of permissive user. The permissive user can’t be a household member, an unlicensed driver, someone who wasn’t granted permission, or someone with regular access to the car. If the claims adjuster finds out the driver should’ve been listed on the policy, it’s possible the claim can be denied and the owner will be left with the choice to sue you or cover the costs on their own.

How is the primary insurer determined when a claim is filed?

Car insurance and how claims are handled can get really tricky when both parties have insurance. The companies will need to communicate and decide which is primarily responsible for the damage. If one company pays and the other owes, the claim may go through subrogation so the carrier can collect.

It’s important to have an insurer that will give you answers when you ask questions. If your insurer isn’t being forthcoming with how your coverage works, it’s time to shop around. Use an online rate comparison tool to see if you can save money with a respected company and you’ll have peace of mind that you’re getting a deal and that you’re protected. Start comparing car insurance rates now by entering your zip code n our FREE tool below!