It can be challenging to fully understand the coverage offered by your vehicle insurance. Although each policy is different in its wording, this question can be answered based on standard policies that follow widely accepted industry practices. Essentially, auto insurance policies have several types of coverage and each can act differently in the way it provides coverage for you and your car. So, certain coverage may follow you and offer protection for other vehicles you drive and other coverage in your policy may go with the car insured and provide coverage for it even if it is driven by someone else, with your permission.
Auto Insurance Coverage That Follows You
Liability coverage: Typically, their liability coverage protects vehicle insurance policyholders when they drive a car belonging to someone else. For example, if you borrow your friend’s automobile, your friend’s insurance policy will be the primary policy in case of an accident. If you cause an accident with your friend’s car, you are at fault and the damages and injuries are higher than your friend’s liability coverage, your own automobile insurance coverage can come in as a secondary policy and cover the rest of the liability claims you are facing, up to your policy limits. Normally, your Collision and Comprehensive coverage doesn’t follow you when you are driving a car belonging to someone else.
Rental cars: Your vehicle insurance policy (assuming it is a standard policy with no special exclusions) normally extends to the autos you rent and covers it the same way it covers your own automobile in your policy. So, if you have a full coverage auto insurance with Liability, Collison and Comprehensive, it extends the same coverage when you rent a vehicle. So, in case of rental cars, your Collision and Comprehensive coverage as well as Liability can follow you.
Personal Injury Protection (PIP): provides coverage for you and your family in case you are injured in a car accident, regardless of fault. And this coverage follows you when you are in another vehicle or even when you are a pedestrian and pay for your medical and associated costs if you suffer injuries.
Vehicle Insurance Coverage That Follows Your Car
Your insurance follows the car in certain circumstances, even if you aren’t driving. If you lend your car to someone else, your policy provides the same coverage as if you were driving the vehicle. For example, if you have Liability, Collison and Comprehensive coverage and the person you lend your automobile to crashes it, your auto insurance will pay for liability claims raised by other individuals involved in the accident, your Collision coverage will pay for the damages to your own vehicle.
Permissive use is the key here. If someone takes your car without your knowledge or permission, your policy will not provide coverage. Also, your policy may not provide coverage to the person who borrowed your car, if that person goes beyond the permissive use. For example, if you borrowed your car so that your friend can go and pick up their children from school and expect the vehicle to be returned in a few hours but your friend keeps the car for the weekend without your permission and takes a road trip involving several hundred miles, they may not be covered beyond your permission.
If you are in the habit of lending your car or borrowing someone else’s car often, you should read your auto insurance policy’s permissive use definition. For example, if a friend is in the habit of borrowing your vehicle every other day, you may be overstretching permissive use and you may need to discuss adding such a person to your policy. And if you specifically excluded a person in your household from your policy, your insurer may not cover the damages such an excluded driver caused. So, you need to pay attention to fine details.
The above answers are based on the assumption that you have a standard policy with no particular restrictions. Every policy comes with fine print and every usage may not fall under a vehicle insurance policy’s coverage. So, you should always read your policy to understand the full extent of its provision or discuss your particular circumstances with your agent or provider before you go ahead and borrow someone else’s vehicle or lend yours to someone else. There are policies with certain limitations and exclusions and you should make sure your policy meets your needs when arranging it.