Most people have an idea of what their insurance policies cover. At AAA Ohio Auto Club Insurance Agency, we often get questions about insurance for borrowing a car or loaning a car to someone else.
Insurance coverage follows the vehicle
Generally, insurance coverage follows the vehicle rather than the driver. In most instances, as long as the owner of the car has insurance, their policy covers it even if someone other than them drives the car.
The borrower’s insurance is considered secondary. In the event of an accident, it could apply if the owner’s insurance can’t fully cover the damage.
It’s important to note that there are some exceptions to this “permissive use” coverage. For example, the owner must give permission must unless the borrower has a reasonable belief that they can use the car. However, the borrower can’t give permission to someone else. So if your teenager allows one of his or her friends to drive your car, your coverage likely won’t apply.
Coverage might also be denied if the borrower operates the vehicle in a negligent or criminal manner. And if the borrower is using your car for business purposes, your personal auto policy likely won’t cover that.
Regular borrowers and lenders
If you regularly either borrow or lend a car, add the borrower to the owner’s auto policy. If you often borrow a car, you might consider “named non-owner coverage.” This endorsement provides bodily injury and property damage liability, uninsured motorists coverage, and more.
Ultimately, it’s usually safe to loan your friend your car for occasional errands or projects. And the same goes for borrowing a car. Just make sure it’s for “normal” use. Confirm that the car has coverage and that your insurance, whether you’re the owner or borrower, will apply.