Does Car Insurance Follow the Car or the Driver?

Understanding insurance coverage if someone else drives your vehicle.

There are moments when you quickly need to borrow a friend’s vehicle, or perhaps you allow a family member from out of town to take yours for a quick errand. In life, you never quite know what will happen and all it takes is a split second for an accident to happen. So, does car insurance follow the car or the driver?

What happens if there is an accident?

What happens if you get in an accident in your friend’s vehicle? Is there coverage? Does it go on your auto insurance or your friend’s auto insurance? Ultimately, does car insurance follow the car or the driver?

When discussing the liability coverage for auto insurance, the Ohio Department of Insurance (DOI) says “we will pay damages for bodily injury or property damage for which any insured becomes legally responsible because of an auto accident.”

Who is the insured?

The insured is more than just the owner of the vehicle. It’s their spouse and any other member of the household that’s a driver on the policy. Additionally, it’s any individual that has permission to use the vehicle. That includes letting your co-worker use the vehicle, or a family member needing to drive it.

Who covers the accident?

This is good to know! You are covered if you borrow your neighbor’s vehicle. But whose insurance covers the accident?

The insurance follows the vehicle. Their insurance is primary, and the driver of the vehicle may use their insurance secondary.

For example, if your co-worker borrows your vehicle and gets into an accident, your auto insurance liability covers first. If the damages caused exceeds the amount of coverage you have, then the co-workers insurance will pay the excess. But their insurance will only kick in once the owner’s policy limits are exhausted. Then the driver will be responsible for further damages.

Wait just a minute…

Now, there are some exclusions to when there is no coverage. Whether there is permission or not, there is no coverage if the driver has any of the following:

• The driver is under the minimum age to obtain a driver’s license.
• The driver does not have a valid driver’s license.
• A suspended or revoked driver’s license is in effect.
• The driver has a restricted license and the vehicle is being used beyond the scope of such restriction.

Additionally, there may not be coverage. It depends on use of the vehicle. Exclusions for a standard auto insurance policy from Ohio ODI include:

• Intentional Acts: injury caused on purpose.
• Injury to Employees: employee injury would be covered by worker’s compensation.
• Taxi or Livery: endorsement available to cover ridesharing
• Auto Business: if the vehicles used in the business of selling, repairing, or servicing cars. A mechanic test driving your vehicle would provide coverage under the business liability policy.
• Commercial use: need a separate commercial auto policy
• Vehicle used without permission
• Non-owned vehicle furnished for your regular use: If you regularly use the vehicle, you need to have insurance on it. Permissive use covers when it’s used occasionally.
• Racing and Speeding events: self-explanatory

Lean in to your insurance professional

Finally, whether you are borrowing a vehicle or someone else is borrowing yours, there is coverage on your auto policy in most cases. For more information or specific details, it may be best to reach out to your agent and see how your specific carrier handles auto insurance claims.

If you are looking for an insurance professional who values building a relationship while making sure you have the proper coverage, we are happy to help. Click on the link below to provide us with some initial information about your auto policy and we will get working on a competitive solution for you!

Thank you to Dominic for providing the information within this blog!